31A-23a-201. Exceptions to producer licensing.

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A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

Effective 5/5/2021

(1)The commissioner may not require a license as an insurance producer of:

(a)an officer, director, or employee of an insurer or of an insurance producer if:

(i)the officer, director, or employee does not receive any commission on a policy written or sold to insure risks residing, located, or to be performed in this state; and

(A)the officer's, director's, or employee's activities are:

(I)executive, administrative, managerial, clerical, or a combination of these activities; and

(II)only indirectly related to the sale, solicitation, or negotiation of insurance;

(B)the officer's, director's, or employee's function relates to:

(I)underwriting;

(II)loss control;

(III)inspection; or

(IV)the processing, adjusting, investigating or settling of a claim on a contract of insurance; or

(I)the officer, director, or employee is acting in the capacity of a special agent or agency supervisor assisting an insurance producer;

(II)the officer's, director's, or employee's activities are limited to providing technical advice and assistance to a licensed insurance producer; and

(III)the officer's, director's, or employee's activities do not include the sale, solicitation, or negotiation of insurance;

(b)a person who:

(i)is paid no commission for the services described in Subsection (1)(b)(ii) ; and

(ii)secures and furnishes information for the purpose of:

(A)group life insurance;

(B)group property and casualty insurance;

(C)group annuities;

(D)a group insurance policy offering accident and health insurance or a blanket insurance policy offering accident and health insurance;

(E)enrolling individuals under plans;

(F)issuing certificates under plans; or

(G)otherwise assisting in administering plans;

(c)a person who:

(i)is paid no commission for the services described in Subsection (1)(c)(ii) ; and

(ii)performs administrative services related to mass marketed property and casualty insurance;

(i)any of the following if the conditions of Subsection (1)(d)(ii) are met:

(A)an employer or association; or

(B)an officer, director, employee, or trustee of an employee trust plan;

(ii)a person listed in Subsection (1)(d)(i) :

(A)to the extent that the employer, officer, employee, director, or trustee is engaged in the administration or operation of a program of employee benefits for:

(I)the employer's or association's own employees; or

(II)the employees of a subsidiary or affiliate of an employer or association;

(B)the program involves the use of insurance issued by an insurer; and

(C)the employer, association, officer, director, employee, or trustee is not in any manner compensated, directly or indirectly, by the company issuing the contract;

(e)an employee of an insurer or organization employed by an insurer who:

(i)is engaging in:

(A)the inspection, rating, or classification of risks; or

(B)the supervision of the training of insurance producers; and

(ii)is not individually engaged in the sale, solicitation, or negotiation of insurance;

(f)a person whose activities in this state are limited to advertising:

(i)without the intent to solicit insurance in this state;

(ii)through communications in mass media including:

(A)a printed publication; or

(B)a form of electronic mass media;

(iii)that is distributed to residents outside of the state; and

(iv)if the person does not sell, solicit, or negotiate insurance that would insure risks residing, located, or to be performed in this state;

(g)a person who:

(i)is not a resident of this state;

(ii)sells, solicits, or negotiates a contract of insurance:

(A)for commercial property and casualty risks to an insured with risks located in more than one state insured under that contract; and

(B)insures risks located in a state in which the person is licensed as provided in Subsection (1)(g)(iii) ; and

(iii)is licensed as an insurance producer to sell, solicit, or negotiate that insurance in the state where the insured maintains its principal place of business; or

(h)if the employee does not sell, solicit, or receive a commission for a contract of insurance, a salaried full-time employee who counsels or advises the employee's employer relating to the insurance interests of:

(i)the employer; or

(ii)a subsidiary or business affiliate of the employer.

(2)The commissioner may by rule exempt a class of persons from the license requirement of Subsection 31A-23a-103(1) if:

(a)the functions performed by the class of persons does not require:

(i)special competence;

(ii)special trustworthiness; or

(iii)regulatory surveillance made possible by licensing; or

(b)other existing safeguards make regulation unnecessary.

Amended by Chapter 252 , 2021 General Session