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Minutes for HB2067 - Committee on Insurance
Short Title
Amending the uniform insurance agents licensing act to require fingerprinting of applicants for a resident insurance agent license.
Minutes Content for Thu, Jan 26, 2017
Chairperson Vickrey opened the hearing on HB 2067.
Jason Thompson, senior Assistant Revisor of Statutes, briefed the committee members on HB 2067. He said the bill would allow the commissioner of insurance to require a person applying for a resident insurance agent license to be fingerprinted for purposes of a national criminal history record check (Attachment 1).
Rep. Corbet commented that requirements have tightened every year.
Representative Bishop asked if there was information on the fingerprinting practice in other states. Mr. Thompson replied he did not but the Insurance Department or the research department might.
Representative Parker asked if the costs were borne by the insurance agent or the applicant. Mr. Thompson replied the the statue provided for costs to be borne by the applicant. Representative Parker asked who was paying the cost now. Mr. Thompson deferred the question to the deputy insurance commissioner.
Mr. Kelly commented that persons in the banking mortgage business were required to be fingerprinted and that it was not unusual in the profession of providing financial products.
Representative Hodge wanted to confirm that a record didn't automatically disqualify a person from obtaining their insurance license. Mr. Thompson replied the insurance department already had criteria in place for what would disqualify an applicant from obtaining an insurance license and that was unchanged by the bill. The bill simply allowed a national criminal history record search. Representative Hodge asked whether fingerprinting was the result of an ongoing issue or if there was a triggering event. Mr. Thompson said that was a question best answered by Mr. Shultz, deputy commissioner of insurance.
Clark Shultz, deputy commissioner, said the Department of Insurance was charged by state statute to protect the public from unscrupulous agents and companies and part of that process involved making sure they were of good character and did not have a criminal past. For that reason, he asked the committee to approve the bill. Currently, part of the $30 application fee was used to have the KBI to do a state-wide background check. The problem was someone from another state could come to Kansas and the department wouldn't know about their criminal history in other states.The bill presented allowed the KBI to do a nationwide criminal history check. He said the state already had reciprocal licensing agreements with other states. Half of the states now required a fingerprint check so if a Kansas agent was working in another state, that state could be assured the Kansas agent didn't have a criminal history. Mr. Shultz said fingerprinting would be introduced gradually and currently it would only apply to new agent licensing (Attachment 2).
Dan Murray gave an oversight of the KAIA and said they supported the bill. In the past, they had not supported such legislation, but after discussion, the KAIA wanted to assure that licensed agents were trusted and vetted (Attachment 3).
Chairperson Vickrey asked if there were any opponents. There were none. He asked if there were any questions from the members.
Representative Hawkins commented that he had been in the insurance business for several years and didn't see an issue with passage of the bill.
Mr. Shultz added agents supported the bill. Agents did not want bad actors in the complex and trusted insurance profession.
Representative Dove said he had been in the insurance business many years and had seen agents from other states. He asked how the bill addressed non-resident licenses.
Mr. Shultz answered that currently licensed agents from other states would be granted a Kansas non-resident license. He said one thing the bill addressed was that if all 50 states required a criminal history check then they could rely on each state having the same standards.
Representative Dove expressed concern that agents go into homes with minors and fingerprinting could avoid potential problems, especially with out of state agents.
Representative Neighbor asked if they gave a license to a non-resident agent with a criminal background was Kansas responsible or did the responsibility go back to the home state.
Mr. Shultz replied if something happened it would be a criminal act in Kansas. As far as licensing, if someone committed a crime in another state, it would be have to be disclosed to Kansas and the Insurance Department could take action.
Representative Neighbor commented the same situation occurred in the teaching profession.
Representative Elliott asked how many applicants they had on a typical annual basis.
Mr. Shultz answered they averaged about 12 per week.
Representative Elliott asked about the department's' access to data bases and whether they called sources.
Mr. Shultz said they do Google and data-bank searches. The concern was whether background checks were able to find all the information about an applicant.
Representative Parker asked if there were any specific instances where not having fingerprint searches in place caused an issue.
Mr. Shultz said he couldn't tie a specific case but there were cases involving questionable financial dealings. It was difficult to know about that prior to the bill because they could only search criminal history in Kansas.
Mr. Parker asked if there were statistics available.
Mr. Shultz answered they could compile statistics. The problem was applicants were sometimes were not forthcoming about past convictions.
Representative Corbet said during the years that the Insurance Department has been in existence, there has been no fingerprinting. After that long without a problem, did that close the door on agents already licensed?
Mr. Shultz said the bill would go forward. There may be resistance if they went back and fingerprinted the 22,000 agents already licensed. Also, even after the bill passed, it would not effect non-resident agents.
Representative Corbet asked how many out of state agents were there.
Mr. Shultz answered there were 100,000 out-of-state agents. He said long-time agents worried that in this lucrative profession there were people with criminal background who wanted to sell insurance.
Representative Hawkins commented that there are many agents who have both insurance and securities licenses and a securities license did require fingerprinting. He said going forward this would make it easier. He said the national licensing agency might create uniform background check language, and that this bill needed to be passed so Kansas can stay in step. He asked the members to keep this in mind.
Representative Orr said he didn't understand whether the bill would allow or require applicants be fingerprinted.
Mr. Shultz said the bill would allow it. The Commissioner did not require fingerprinting at this point and the department would work things out going forward.
Representative Eplee asked if the bill would make it hard for non-resident agents to be licensed.
Mr. Shultz responded there was a trend in other states to adopt similar statutes and if Kansas did not it would become impossible for Kansas agents to get out of state licensing.
Representative Parker asked if uniformly, the other states were requiring fingerprinting for new agents or all agents.
Mr. Shultz answered he believed that all or almost all states would require fingerprinting going forward.
Chairperson Vickery asked if there were any opponents to the bill. There were none. He closed the hearing on HB 2067.
