AIIA Supports Bill to Lengthen Licensing

Alabama HB227 which would lengthen the licensing period for insurance producers, service representatives and adjusters from the present one year, to two or more years and would increase the 12-hour continuing education requirement to 24 hours has gained the support of the Alabama Independent Insurance Agents. During AIIA’s Young Agent’s Legislative Conference last week in Montgomery, AIIA issued a position paper supporting five bills and saying it did not support two bills.

HB227 would also require three hours of continuing education on the topic of insurance producer ethics and would adjust licensing fees as necessary to accommodate biennial licensing. It would authorize the insurance commissioner to promulgate regulations to provide for the transition from annual renewal to biennial renewal.

AIIA supports this legislation because most licenses are available for renewal at terms longer than one year. The bill will allow the Department of Insurance to allocate human resources to other departments without placing any burden on the licensing division. With only half the licensees renewing their license in any given year, fewer people will be needed to perform the job.

The bill will allow the DoI to allocate human resources to other departments without placing any burden on the licensing division. With only half the licensees renewing their license in any given year, fewer people will be needed to perform the job.

The bill passed out of the Alabama House Banking and Insurance Committee Jan. 26 and received its second reading. SB 0251 was amended in committee to exempt legislators. It received its second reading Jan. 19 and its final reading Jan. 24. The amended Senate Bill was sent to the House Banking and Insurance Committee.

Two unsupported bills

AIIA does not support the Double Dipping Bill (SB57) or the Customer Service Representative Bill.

SB57 would allow an employee who received workers’ compensation benefits because of injuries sustained in a work-related motor vehicle accident to receive uninsured motorist benefits from an insurer or the insurer of the employer, or both. The bill would repeal and supersede conflicting provisions of law. Existing law has been interpreted to prohibit an employee who received workers’ compensation benefits from an insurer.

AIIA opposes this legislation because at the turn of the last century, businesses gave up three common defenses in return for workers’ compensation benefits. This established the “Sole Remedy Theory” that, workers’ compensation would be the sole source of recovery for an injured worker. AIIA feels this bill would establish an exception to that principle and establish precedent for other sources of recovery. This bill is also opposed by the Business Council of Alabama.

SB57 was referred to the Senate Banking and Insurance Committee Jan. 10, passed out of committee and received its second reading Jan. 26.

HB582 and SB417 would include persons employed by insurance producers within the definition of service representatives and allow them to market “limited lines” of insurance, specifically life, credit life and auto rental coverage without being examined by the state to do so. Under existing law, certain terms are defined for insurance regulation and specifically for licensing of insurance producers.

AIIA opposes this bill because it would allow a customer service representative employed by a carrier working for a producer to sell and transact insurance business without passing a license exam.

AIIA says this is similar to the bill introduced last year, except this bill would allow the sale of all lines of insurance without the requirement of passing a license examination for any lines of insurance.

This bill was filed Feb. 8 and has been referred to the House and Senate Banking and Insurance committees.

Topics Legislation Workers' Compensation Alabama