Source: http://regulations.delaware.gov/register/november2004/final/8%20DE%20Reg%20703%2011-01-04.htm
Timestamp: 2018-12-18 20:51:21
Document Index: 290520204

Matched Legal Cases: ['§10113', '§10113', '§311', '§314', '§ 323', '§170621', '§334', '§170621']

8 DE Reg 703 11-01-04
A public hearing was held on October 5, 2004 to receive comments on amendments to Regulation 504 relating to continuing education for licensed producers and adjusters. By my order of September 28, 2004, Gregory D. Sacco was appointed hearing officer to receive comments and testimony on the proposed amendments to the regulation. Public notice of the hearings and publication of proposed Regulation 504 in the Register of Regulations and two newspapers of general circulation was in conformity with Delaware law. Six persons attended the public hearing. Three written comments were received by the Department as a result of the public notice for comment.
Eugene T. Reed, Jr., the director of Consumer Services and Licensing for the Department described the proposed changes and recommended their adoption as proposed. The specific changes that Mr. Reed addressed were:
• The provisions of section 3 that allow electronic submissions, reciprocal agreements relating to continuing education with the NAIC, and course approval expirations. Providers will now be responsible for submitting a course roster of attendees. The ability of Delaware to participate in reciprocal crediting of CE credits with other NAIC member states provided the course meets the course approval standards established under this regulation.
• Section 7 allows the use of electronic reporting. The provisions of section 8 that increase the continuing education requirement for Producers to twenty-four (24) credit hours based on NAIC adopted uniform standards, four (4) of which must be in ethics. The section also requires at least three (3) hours of training for those licensees who solicit long term care policies. This section increases the continuing education requirement for Adjusters, Public Adjusters, and Fraternal Producers to twelve (12) credit hours, four (4) of which must be in ethics. Limited Lines Producers and non-resident Adjusters’ continuing education requirements have been eliminated. It will be the responsibility of the non-resident to meet their home state requirements. This is a requirement for states under GLBA for Producers.
• Section 10 increases the number of council members from four to five members for life/health and property/casualty and increases the number of claims professionals on the council from one to four.
Deputy Attorney General Michael J. Rich noted several non-substantive changes to the regulation that were not published but were desirable and appropriate. The first was to recommend that the phrase “the last day of February” be used in section 2.6 instead of the number “28.” The second was to recognize that a phrase was missing from the published version of the proposed changes in section 9.1. The phrase “shall be subject to an administrative penalty up to” has to be inserted after the words “8.5 of this regulation” in section 9.1. The third was to note that minor grammatical changes were needed to sections 2.9, 8.4, 9.2 and 10.3.
Carl W. Hill, of the National Association of Insurance and financial Advisors—Delaware (NAIFA-DE), noted his organization’s support for the proposed changes.
Cheryl Smith suggested that section 3.2.5 be amended to allow for a partial credit for self-study providers under certain circumstances. It was noted that the Department had recommended the case-by-case review for partial credit requests under section 3.2.5 rather than a specific non-reviewable allowance as a policy matter. The Department recommended against any change to the proposed language.
The Insurance Agents & Brokers of Delaware submitted written comments that supported adoption of the changes and which addressed the following items: an incorrect reference to section 9.3 instead of 8.3 in section 4.1.2; the missing phrase from section 9.1 and the failure to use the term “authorized representative” in the regulation even though it is included in the definitions.
The purpose for a public hearing on a proposed regulatory change is to determine the necessity for the change and whether the language proposed to effect that change needs to be changed or modified for purposes of clarity or efficiency. There were no objections to the adoption of the proposed changes to the regulation. I find that the proposed grammatical and semantic changes are describable for purposes of clarity and do not require republication and rehearing under the provisions of 29 Del.C. §10113. I find that the addition of the phrase “the last day of February” be used in section 2.6 instead of the number “28.” And the phrase “shall be subject to an administrative penalty up to” in section 9.1 are not substantive and do not require republication and rehearing under the provisions of 29 Del.C §10113. I find that the Department’s recommendation not to change its current policy concerning the issuance of partial credit for courses except on a case by case basis under section 3.2.5 is consistent with its regulatory functions and does not violate any applicable law or the purpose and intent of the regulation.
I find that the term “authorized representative,” although not used in the regulation, was intended to allow an entity sponsor or provider to identify the person who would act on its behalf and serve as a contact person whom the Department could work with as needed for regulatory compliance.
Based on the provisions of 18 Del.C. §§311 and 1718, and the record in this docket, I adopt the FINAL REPORT AND RECOMMENDATION OF THE HEARING OFFICER dated October 11, 2004 and order that Regulation 504 be amended as provided for in the notice published in the Delaware Register of Regulations 8 DE Reg. 409 (9/1/04) as modified by the changes to sections 2.6, 2.9, 8.4, 9.1, 9.2 and 10.3 and the amendment to the definition of authorized representative.
I order that the proposed change shall become effective on November 15, 2004.
This Regulation is established and promulgated pursuant to 18 Del.C. §§314, 1726 1718 and 29 Del.C. Ch.101.
The purpose of this Regulation is to establish requirements for insurance education and ethics for resident insurance adjusters, public adjusters, producers, agents, brokers, surplus lines brokers and for standards for education providers and instructors in order to ensure a high level of professionalism for the benefit of Delaware consumers.
32.0 Definitions
"Audit" means Insurance Department activity to monitor the offering of courses or examinations, including visits to classrooms, test sites, and administrative offices where documentation of individual attendance and completion records and documentation of instructor credentials is maintained. Audit may include re-evaluating approved classroom course outlines, and self-study programs and distance learning programs based on current guidelines.
"Authorized representative" [or “provider representative”]means the person designated by the entity as responsible for the timely filing of all required Department forms and documentation for courses and for the maintenance of necessary administrative records including but not limited to classes held, examinations monitored, instructor qualifications, and attendance records. [Where this regulation provides for an act by an entity sponsor or provider, such act shall be performed by an authorized representative.]
• Self-Study, means a passing grade of 70% or better on the examination.
• Class, means attendance for the full amount of time approved for each course.
• Seminar means attendance for the full amount of time assigned for each workshop or break-out session selected.
"Compliance date" means the [28th last] day of February of the continuing education reporting period for which resident licensee continuing education or non-resident renewal is required. Each license biennium shall commence on March 1st and end February 28th of the odd year period for non-residents and the even year for residents even numbered years. Each biennial license shall commence on March 1st and end [on the last day of] February [28th] of even numbered years.
"Course" shall means any class, self-study, or seminar or distance learning course for insurance producers, surplus lines brokers, adjuster and public adjustor licensees or other insurance professionals that producers, surplus lines brokers, adjuster and public adjustor licensees or other insurance professionals that has been approved by the Department for the purpose of complying with continuing education requirements.
"Ethics credits" means the study of fiduciary responsibility, commingling of funds, payment and acceptance of commissions, unfair claims practices, professionalism, policy replacement consideration, handling or supervising the affairs or funds of another, and conflicts of interest and matters that deal with individual character and personal characteristics such as honesty, integrity and professionalism in the insurance industry.
"Hour" means sixty (60) minutes of class or seminar time, of which at least fifty (50) minutes must be instruction, with a maximum of ten minutes of break per hour all of which must be accounted for on the agenda or syllabus. For self-study courses, "hour" means fifty (50) sixty (60) minutes of time including reading and studying which would be necessary to successfully complete the final examination (actual exam time not included).
43.0 Course Providers
43.1 Provider Approval. A provider who sponsors a continuing education course must be approved by the Commissioner Department and shall be operated by, including but not limited to, an authorized insurance company, a recognized insurance agents’ association, an insurance trade association, a self-insurance fund, a non-profit educational institute, national provider, a member of a state Bar Association, an independent program of instruction, or an institution of higher learning. Application for entity approval shall be concurrent with application for course approval and shall be submitted on written forms or in an electronic format approved prescribed by the Commissioner Department. The Department may approve of or participate in reciprocal agreements relating to continuing education with the NAIC and/or its members. In assessing a provider’s application for approval, the Commissioner Department may consider, among other factors, whether the management of a provider, including officers, directors, or any other person who directly or indirectly controls the operation of the provider, fails to possess and demonstrate the competence, fitness and reputation deemed necessary to serve the provider in such position.
43.2 General Requirements and Responsibilities.
43.2.1 Providers shall maintain the records of each individual completing a course for three (3)4 years from the date of completion and shall send the Department a roster of those in attendance within thirty (30) days of the course completion date on forms or in electronic format prescribed by the Department upon request of the Commissioner submit a course roster list of course attendees which includes all information available on Form CE-4.
43.2.2 Providers shall notify the Producer Agent and Agency Licensing Education Section, within thirty (30) days of a change in their mailing address or administrative office address.
43.2.3 Course providers will provide each licensee successfully completing their program a Certificate of Completion /Course report form CE-4 in accordance with section 8.4. It must contain, at a minimum:
4.2.3.1 Licensee’s name
4.2.3.2 Social Security Number
4.2.3.3 Title of the educational activity
4.2.3.4 Delaware course number
4.2.3.5 Delaware sponsor number
4.2.3.6 Number of CEUs earned
4.2.3.7 Authorized signature of school official
for attendees’ records only after successful completion of the entire approved education course/activity. Entity Sponsors are required to distribute a Certificate of Completion to each licensee successfully completing the educational activity within thirty (30) calendar days.
43.2.4 Course providers shall obtain the Commissioner Department’s approval for each course offered. No prior approval shall be required for any course offered through any NAIC sponsored reciprocal agreement but course credit under this regulation shall only be allowed for those subjects eligible for course credit in Delaware. A Course Report Form CE-4 shall be completed and distributed to the licensee only after completion of the entire course. Entity Sponsors are required to distribute course report forms to each licensee successfully completing the educational activity within fifteen (15) calendar days.
43.2.5 No partial credit may be granted for any course unless an emergency arises. In case of an emergency, a written explanation shall be provided to the Commissioner Department upon request.
43.2.6 Self-study courses shall contain an exam that shall be graded by the sponsor or an approved third party. No credit shall be given for a failing grade.
43.2.7 One Continuing Education Credit shall consist of fifty (50) minutes of qualifying classroom instruction.
43.2.8 Course Providers are responsible for the actions of their school officials, instructors, speakers and monitors.
43.2.9 Entity sponsors and instructors shall conduct themselves in a professional manner and may not misrepresent any course material or other information.
43.2.10 Educational activities are approved for a term of 3 years unless requested by the Commissioner to be resubmitted for approval. Course approvals, once granted by the Department, shall remain valid until modified or terminated by the entity sponsor or Department. Any changes or modifications to one or more courses by an entity sponsor shall not be valid until submitted to and approved by the Department in writing. All courses approved for credit as of November 1, 2004 shall not be subject to re-approval under the provisions of this section.
43.2.11 No activity may be advertised as having been approved until the sponsor receives written notification from the Department. The use of "approval pending" is acceptable advertising.
45.0 Instructors
45.1 An entity sponsor shall certify to the Department that tThe instructor shall possess one or more of the following qualifications:
45.1.1 A minimum of 3 years working experience in the subject matter being taught.
45.1.2 An approved professional designation in accordance with Section 9.3 from a recognized association.
451.3 A degree from an accredited school in the subject matter being taught.
45.1.4 Special expertise, such as employment with a governmental entity; or a documented history of research or study in the area.
45.1.5 An instructor who is a licensee shall receive two times the same number of continuing education credits granted to participants. The instructor may not receive additional credit for teaching the same course more than once in a biennium reporting period.
45.1.6 Instructors shawill have the authority and responsibility to deny credit to anyone who disrupts the class or is inattentive. Based on the course provider’s policies, refunds may be given. It will be a violation of this regulation for an instructor or school official to knowingly allow during the class, the activities of sleeping, reading of books, newspapers, or other non-course materials, use of a cellular phone, or to allow absence from class other than authorized breaks. Penalties will be assessed against participant, instructor, and school, as provided in this regulation. Approval of a course will constitute approval of submitted instructors. Course submissions must include a narrative biography of each instructor.
56.0 Commissioner Department’s Action upon Violation or Non-conformity by Course Provider or Instructor
If the Commissioner Department determines that a course provider or instructor has violated any provisions of this regulation, the Commissioner Department may withdraw approval of the entity sponsor or instructor or may order a monetary penalty or refund of course fees to licensees who attended the course, or both. The Commissioner Department may also refuse to approve courses conducted by specific sponsors or instructors if the Commissioner Department determines that past offerings by those entity sponsors or instructors have not been in compliance with insurance education laws, rules and regulations. The Commissioner Department or his/her designee(s) may perform course provider audits on all educational activity proposed to be available to licensees of this State.
67.0 Appeals
67.1 Appeals shall be conducted in accordance with the Delaware Administrative Procedures Act, 29 Del.C. Ch.101 and 18 Del.C. §§ 323-28.
67.2 Providers may appeal to the Commissioner or Commissioner’s designee, from any adverse decision on their request concerning continuing education activity. Appeals shall be in writing and minimally contain:
67.2.1 A synopsis of the issue,
67.2.2 The basis for the appeal,
67.2.3 The name, address, and telephone number of a contact person,
67.2.4 A copy of the original course submission and supporting documents, and
67.2.5 A copy of any correspondence from the Continuing Education Advisory Council or the Insurance Department.
78.0 Required Forms.
Course Providers shall apply for registration, course submission, repeat course submission and licensee certificate of completion (Delaware Course Report Form) on forms prescribed and approved by the Commissioner. The following forms apply unless or until revised by the Commissioner:
8.1 Request for entity sponsor approval shall be made on Department Form CE-1 (Attachment 1).
8.2 Request for entity sponsor course approval shall be made on Department Form CE-2 (Attachment 2).
8.3 Course providers shall submit a Form CE-3 to the Department not less than 7 days prior to the offering of any course that was previously approved by the Department for an unspecified date or is to be repeated. (Form CE-3 Attachment 3)
8.4 Form CE-4 Course Report Form. Form CE-4 contents may be submitted in an alternative format so long as prior approval is obtained.
8.5 Continuing Education Course Evaluation Form CE-5. The Department may request licensees to complete course evaluation forms as a means of auditing a course and entity sponsor.
89.0 Licensee’s Responsibility.
89.1 Each licensee shall retain each original course completion certificate/course report form(s) CE-4 for a period of 3 years. The certificate of completion Form CE-4 may be required in the event of a discrepancy between the licensee’s records and the Department’s records. Each licensee may be subjected to a Department audit of continuing education requirements. Failure to comply with a Department audit may result in suspension of a licensee’s license. Each licensee will have thirty (30) days to produce such records upon request or audit by the Department Pursuant to section 8.5, the Department may require a licensee to complete a course evaluation form.
89.2 General Requirements. Resident licensees and producers not otherwise exempted shall earn, at a minimum, the number of education credits described below.
89.2.1 Resident licensees required to fulfill continuing education requirements shall complete twenty-four (240) credit hours of Department approved education subjects, four (4) of which shall be in ethics subjects during each biennium reporting period. If the resident producer holds a health license and solicits long term care policies, as part of his/her biennial requirement, the producer must complete at least three (3) hours of training in Delaware long term care insurance that consists of product knowledge, laws, rules and regulations.
89.2.2 Resident adjusters, public adjusters Limited Representatives, Adjusters and Fraternal Agents shall be required to fulfill twelveten (120) credit hours of Department approved education subjects, four (4) of which shall be in ethics subjects during each biennium reporting period.
89.2.3 Resident licensees subject to this regulation shall file with the Department a copy of their completed course report forms. Course report form CE-4(s) must be received on or before March 20th following the preceding biennium compliance date. Failure to timely file will result in notice of suspension and fines under section 10.0 of this regulation. 9.2.4 Resident licensees will receive a continuing education transcript at least ninety (90) days prior to the end of a license biennium by mail or by electronic access as the Department deems appropriate. The licensee is responsible for reviewing the transcript for accuracy. To dispute the Department’s accounting, the licensee must submit a written exception thereto prior to the biennium deadline (February 28th of even years) and include a copy of the providers course completion certificate course report form CE-4.
89.2.45 The maximum number of carryover credits shall not exceed five (5)10 credits in a biennium reporting period. Carryover shall not apply to ethics credit requirements. Credits in excess of the mandatory requirements set forth in section 8.2.1 may be applied to the licensee’s general course requirements for those in excess of the March 1, 1997 through February 28, 1998 Continuing Education period. Thereafter, the maximum number of carryover credits shall not exceed 5 credits in a biennium reporting period. Carryover shall not apply to ethics credit requirements. Ethics credits in excess of the mandatory requirement may apply to non-ethics credit requirements.
9.2.6 Fulfillment of continuing education requirements includes completion of approved subject matter and ethics requirements during the biennium.
9.2.7 No continuing education requirement shall apply to newly licensed individuals during the biennium in which such individuals are licensed. A total of 5 credits in excess of 20 credits earned may apply to carryover during the newly licensed biennium period.
89.3 Automatic credit. For experience aAn individual continuously licensed for twenty-five (25) years or longer prior to the start of a biennium reporting period and/or who for holdsing a professional designation shall receive an automatic credit of twelveen (120) credits in each biennium. The Department shall maintain a list of approved professional designations Approved professional designations are the AAI, CEBS, CLU, CPCU, ChFC, FLMI, CFP, FSPA, CIC and RHU. Automatic credits may not be applied to satisfy the mandatory continuing education courses set forth in section 8.2.1 ethics credit requirements.
89.4 License reinstatement after suspension, or revocation or cancellation. All resident and nonresident licensees whose licenses were canceled, suspended or revoked for a period of twelve (12) months or more shall first complete all licensing requirements under 18 Del.C. §170621 including the retaking of [all] exams for [the all] lines of authority under which the individual proposes to transact insurance. Any licensee who is reinstated under the provisions of this subsection shall not be entitled to the waiver provided for in section 8.2.5.
89.5 Extension of time. For good cause shown, the Department Commissioner may grant an extension of time during which the requirements imposed by this regulation may be completed. The extension shall not exceed twelve (12) months. The extension will not alter the requirements or due date of the succeeding biennium period. "Good cause" includes disability, natural disaster, or other extenuating circumstances. Each request for extension of time shall be in writing from the licensee and shall include details and any documentation to support the request. Each request must be received by the CommissionerDepartment no less than thirty (30) days before the expiration of the biennium period.
89.6 Waiver of Continuing Education Requirements. The requirements of this regulation may be waived in writing by the Department Commissioner for good cause shown. "Good cause" includes long-term illness or incapacity, serving full-time in the armed forces of the United States of America on active duty outside of the state of Delaware, and any other emergency situations deemed appropriate by the Department Commissioner. Request for waivers of continuing education requirements shall be made in writing and shall be submitted to the Department Commissioner no later than thirty (30) days prior to the end of the biennium for which such waiver is requested. Those individuals serving full time in the armed forces of the United States of America on active duty outside of the State of Delaware shall notify the Department upon their return by supplying a copy of their activation orders as part of their application for a waiver. Any waiver granted pursuant to this regulation shall be valid only for the biennium for which waiver application was made.
89.7 Sixty (60) days prior to the start of each biennium, the Department shall prepare and publish a list of those lines of insurance for which the producers are exempt from the requirements of section 8. Exemptions to continuing education requirements:
9.7.1 Agents licensed for the lines of title insurance or travel accident and baggage insurance.
9.7.2 Interim Agents.
89.8 Resident adjusters licensed for the lines of Fidelity and Surety and/or Marine and Transportation are exempt from the provisions of section 8.2.2 of this regulation. Nonresident adjusters and public adjusters must meet the license requirements of their home state. Nonresident Agent, Broker, Consultant responsibilities.
9.8.1 Nonresident licensees shall file a home state letter of certification not more than ninety (90) days old when received by the Commissioner, which provides evidence of license status and compliance with continuing education requirements in his or her state of residence. The filing requirement for nonresidents shall be on odd years with a deadline date of February 28th every odd year beginning in year 1999.
9.8.2 The Department will send renewal notices to all nonresident licensees at least ninety (90) days before the end of the biennium. Nonresidents may request a thirty (30) day extension to file for renewal provided it is in writing to the Commissioner at least thirty (30) days prior to the biennium deadline and shall provide evidence of seeking a home state letter of certification.
9.8.3 Nonresidents who fail to provide certification from home state under this regulation shall be subjected to the same penalties as a resident agent under this regulation pursuant to section 10.0.
9.9 Nonresident Adjusters responsibilities.
9.9.1 Nonresidents receiving a license in Delaware - no requirements for the biennium in which they are licensed.
9.9.2 Nonresident adjusters who must meet continuing education requirements established by the insurance department in their home state shall file a home state letter of certification not more than ninety (90) days old when received by the Commissioner, which provides evidence of license status and compliance with continuing education requirements in his or her state of residence. The filing requirement for nonresidents shall be on odd years. The first biennium for which nonresidents shall meet continuing education requirement begins on March 1, 1999 and ends February 28, 2001.
9.9.3 Nonresidents who are not required to complete continuing education requirements in their home state are subject to the same continuing education requirements that a resident adjuster must complete in accordance with section 9.2.2 of this regulation.
9.9.4 Exemptions to Adjuster Continuing Education Requirements. Resident adjusters licensed for the lines of Fidelity and Surety and/or Marine and Transportation are exempt from the provisions of section 9.2.2 of this regulation. Nonresident adjusters licensed for the lines of Fidelity and Surety and/or Marine and Transportation shall file a home state letter of certification not more than ninety (90) days old when received by the Commissioner, which provides evidence of license status. The filing requirement for nonresidents shall be on odd years. The first biennium for which nonresidents shall meet continuing education requirements begins on March 1, 1999 and ends February 28, 2001.
910.0 Penalty for Noncompliance.
910.1 Pursuant to 18 Del.C. §§334, 17132, and 171834, any licensee who fails to complete the minimum requirements of this regulation, and who has not been granted an extension of time to comply under section 89.5 of this regulation [shall be suject to an administrative penalty up to] and including a $2000.00 fine and suspension of license(s) for one year. Submission of false or fraudulent information shall result in an administrative penalty up to and including a $15,000.00 fine and permanent revocation of license.
910.2 Any appointment(s) of such licensee suspended for failure to comply with this regulation shall likewise be suspended by operation of law. Upon satisfactory completion of education requirements in arrears and payment of any administrative fine imposed within a period of twelve (12) months, all license(s) and appointments shall be reinstated unless or until the insurer notifies the Department Commissioner and licensee in writing of the insurer’s intent to terminate such appointment. If suspension is for a period of twelve (12) months or greater, the licensee is subject[ed] to compl[yingiance] with 18 Del.C. §170621 including the retaking of [all] examinations for [all] line(s) of authority for which the individual licensee seeks a license that the individual proposes to transact insurance.
910.3 The Commissioner may, by Order based upon a reasonable belief that a violation of Title 18 occurred, require any individual licensed under 18 Del.C. Ch. 17 based upon reasonable belief that a violation of Title 18 occurred, to complete in addition to biennium insurance education requirements, approved continuing education course work to ensure the maintenance and improvement of a licensee’s insurance skills and knowledge.
101.0 Continuing Education Advisory Council
10.1 The Council shall consist of fourteenten (104) licensees drawn from the professional organizations and the insurance industry in the State, 5 from the life and health field, and 5 from the property and casualty field and four (4) from the claims settlement field.
101.21 One of the primary responsibilities of the Council shall be to review applications for course approvals and make recommendations to the Department Commissioner regarding acceptance/ rejection and the number of CEUs to be granted if accepted.
101.32 The Council shall also advise the Department Commissioner on matters of concern as they arise and [be the provide] liaison between the Department and the professional organizations.
101.43 Members shall serve a term of 2 years. Any member may be reappointed for successive terms. The committee shall meet every 2 months on the third Tuesday of the month or additionally as required. The members of the committee shall serve without pay and shall not be reimbursed for any expenses.
101.54 The Department’s decision with respect to any Entity Sponsor submission shall be final. All previously approved continuing education courses at the time this regulation becomes effective shall resubmit for approval within twelve months of the effective date of this regulation. Such courses must be resubmitted for approval within twelve (12) months of the effective date of this regulation.
11.5 The final decision on each Entity Sponsor submission shall be the Commissioner’s.
121.0 Separability
12.1 If any provision of this Regulation shall be held invalid, the remainder of the Regulation shall not be affected thereby.
132.0 Effective Date
13.1 This Regulation shall become effective March 1, 1998 and shall remain in effect until rescinded. Prior to the aforementioned date the provisions of Regulation 504 (Formerly Regulation 47) as last amended in 1987 shall remain in effect. The amendments to this Regulation shall become effective November 15, 2004. Any matters that are not merely procedural in nature arising prior to November 15, 2004 shall be governed by the provisions of the prior version of this regulation in effect at the time the matter arose.
Amended _____, 2004
8 DE Reg. 703 (11/01/04)