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Searching 2021-2022 Session

The Vermont Statutes Online

 

Title 8 : Banking and Insurance

Chapter 121 : FRATERNAL BENEFIT SOCIETIES

(Cite as: 8 V.S.A. § 4488)
  • § 4488. Licensing of agents

    Agents of societies shall be licensed in accordance with the provisions of this section.

    (1) Insurance agent defined. The term "insurance agent" as used in this section means any authorized or acknowledged agent of a society who acts as such in the solicitation, negotiation, procurement, or making of a life insurance, accident and health insurance, or annuity contract.

    (2) License required. Any person who in this State acts as insurance agent for a society without having authority so to do by virtue of a license issued and in force pursuant to the provisions of this section shall, except as provided in subdivision (1) of this section, be guilty of a misdemeanor.

    (3) Payment of commissions forbidden. No society doing business in this State may pay any commission or other compensation to any person for any services in obtaining in this State any new contract of life, accident, or health insurance, or any new annuity contract, except to a licensed insurance agent of the society and except to an agent exempted by the Commissioner of Financial Regulation.

    (4) Prerequisites, issuance, and renewal of insurance agents' licenses.

    (A) The Commissioner of Financial Regulation may issue a license to any person who has paid an annual license fee of $30.00 and who has complied with the requirements of this section, authorizing the licensee to act as an insurance agent on behalf of any society named in the license which is authorized to do business in this State.

    (B) Before any insurance agent's license shall be issued there shall be on file in the office of the Commissioner of Financial Regulation the following documents:

    (i) A written application by the prospective licensee in such form or forms and supplements thereto, and containing such information, as the Commissioner of Financial Regulation may prescribe.

    (ii) A certificate by the society which is to be named in the license, stating that the society has satisfied itself that the named applicant is trustworthy and competent to act as an insurance agent and that the society will appoint the applicant to act as its agent if the license applied for is issued by the Commissioner of Financial Regulation. The certificates shall be executed and acknowledged by an officer or managing agent of the society.

    (C) A written examination may be required of any individual seeking to be named as a licensee to represent a fraternal benefit society as its agent.

    (D) The Commissioner of Financial Regulation may refuse to issue or renew any insurance agent's license if in his or her judgment the proposed licensee is not trustworthy and competent to act as an agent, or has given cause for revocation or suspension of the license, or has failed to comply with any prerequisite for the issuance or renewal, as the case may be, of the license.

    (E) Every license issued pursuant to this section, and every renewal thereof, shall expire on December 31 of the even-numbered calendar year following the calendar year in which the license or renewal license was issued.

    (F) If the application for a renewal license has been filed with the Commissioner of Financial Regulation on or before December 31 of the year in which the existing license is to expire, the applicant named in the existing license may continue to act as insurance agent under the existing license, unless it shall be revoked or suspended, until the issuance by the Commissioner of Financial Regulation of the renewal license or until the expiration of five days after he or she has refused to renew the license and has served written notice of the refusal on the applicant. If the applicant shall, within 30 days after the notice is given, notify the Commissioner of Financial Regulation in writing of his or her request for a hearing on such refusal, the Commissioner of Financial Regulation shall, within a reasonable time after receipt of such notice, grant the hearing, and he or she may, in his or her discretion, reinstate the license.

    (G) A renewal license of an insurance agent may be issued upon the application of the society named in the existing license. The application shall be in the form or forms prescribed by the Commissioner of Financial Regulation and shall contain such information as he or she may require. The application shall contain a certificate executed by the president, or by a vice president, a secretary, an assistant secretary, or corresponding officer by whatever name known, or by an employee expressly designated and authorized to execute the certificate of a domestic or foreign society or by the United States manager of an alien society, stating that the addresses therein given of the agents of the society for whom renewal licenses are requested therein have been verified in each instance immediately preceding the preparation of the application. Notwithstanding the filing of the application, the Commissioner of Financial Regulation may, after reasonable notice to the society, require that any or all agents of the society to be named as licensees in renewal licenses shall execute and file separate applications for the renewal of the licenses, as hereinbefore specified, and he or she may also require that each such application shall be accompanied by the certificate specified in subdivision (B)(ii) of this subdivision (4).

    (5) Notice of termination of appointment of insurance agent. Notice of termination of appointment of insurance agent. Every society doing business in this State shall, upon the termination of the appointment of any insurance agent licensed to represent it in this State, forthwith file with the Commissioner of Financial Regulation, a statement, in such form as he or she may prescribe, of the facts relative to the termination and the cause thereof. Every statement made pursuant to this section is privileged and shall be kept confidential to the same extent as provided under subsection 4813m(f) of this title.

    (6) Revocation or suspension of insurance agent's license.

    (A) The Commissioner of Financial Regulation may revoke or may suspend for such period as he or she may determine, any insurance agent's license if, after notice and hearing as specified in this section, he or she determines that the licensee has:

    (i) violated any provision of, or any obligation imposed by, this section, or has violated any law in the course of his or her dealings as agent;

    (ii) made a material misstatement in the application for the license;

    (iii) been guilty of fraudulent or dishonest practices;

    (iv) demonstrated his or her incompetency or untrustworthiness to act as an insurance agent; or

    (v) been guilty of rebating as defined by the laws of this State applicable to life insurance companies.

    (B) The revocation or suspension of any insurance agent's license shall terminate forthwith the license of the agent. No individual whose license has been revoked shall be entitled to obtain any insurance agent's license under the provisions of this section for a period of one year after the revocation or, if the revocation be judicially reviewed, for one year after the final determination thereof affirming the action of the Commissioner of Financial Regulation in revoking the license. (Added 1959, No. 197, § 28, eff. Nov. 22, 1959; amended 1985, No. 236 (Adj. Sess.), § 1, eff. June 3, 1986; 1989, No. 225 (Adj. Sess.), § 25; 1991, No. 166 (Adj. Sess.), § 9; 1995, No. 180 (Adj. Sess.), § 38; 2011, No. 78 (Adj. Sess.), § 2, eff. April 2, 2012; 2015, No. 29, § 7.)