DAR File No. 43696

Insurance, Administration

Rule R590-281

License Applications Submitted by Individuals Who Have a Criminal Conviction

Notice of Proposed Rule

(New Rule)

DAR File No.: 43696
Filed: 05/01/2019 10:14:29 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

This rule codifies a standard for issuing an insurance license to individuals who have been convicted of or pleaded no contest to any felony, or to a misdemeanor involving fraud, misrepresentation, theft, or dishonesty.

Summary of the rule or change:

To be eligible to apply for an insurance license, an individual who has been convicted of or pleaded no contest to any felony, or to a misdemeanor involving fraud, misrepresentation, theft, or dishonesty must have first: 1) paid all fines and restitution; and 2) waited a specified period of time based on the type of conviction. An individual who has been convicted of violating 18 U.S.C. Sec. 1033, or who has been convicted of a felony involving dishonesty or breach of trust, may not apply for a license without obtaining written consent to engage or participate in the business of insurance as provided in Section R590-278-1 et seq.

Statutory or constitutional authorization for this rule:

• Subsection 31A-2-201(3)

Anticipated cost or savings to:

the state budget:

There is no anticipated cost or savings to the state budget. This rule merely codifies an informal practice that the Insurance Department (Department) has used when considering approving a license for an individual who has a criminal conviction.

local governments:

There is no anticipated cost or savings to local governments. This rule merely codifies an informal practice that the Department has used when considering approving a license for an individual who has a criminal conviction.

small businesses:

There is no anticipated cost or savings to small businesses. This rule merely codifies an informal practice that the Department has used when considering approving a license for an individual who has a criminal conviction.

persons other than small businesses, businesses, or local governmental entities:

There is no anticipated cost or savings to any other persons. This rule merely codifies an informal practice that the Department has used when considering approving a license for an individual who has a criminal conviction.

Compliance costs for affected persons:

There are no anticipated costs for any affected persons. This rule does not represent a change in how the Department conducts its business; this rule is similar to informal practices that the Department has followed for many years.

Comments by the department head on the fiscal impact the rule may have on businesses:

After conducting a thorough analysis, it was determined that these proposed rule changes will not result in a fiscal impact to businesses.

Todd E. Kiser, Commissioner

The full text of this rule may be inspected, during regular business hours, at the Office of Administrative Rules, or at:

Insurance
Administration
Room 3110 STATE OFFICE BLDG
450 N MAIN ST
SALT LAKE CITY, UT 84114-1201

Direct questions regarding this rule to:

• Steve Gooch at the above address, by phone at 801-538-3803, by FAX at 801-538-3829, or by Internet E-mail at [email protected]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

06/14/2019

This rule may become effective on:

06/21/2019

Authorized by:

Steve Gooch, Information Specialist

Appendix 1: Regulatory Impact Summary Table*

Fiscal Costs	FY 2019	FY 2020	FY 2021
State Government	$0	$0	$0
Local Government	$0	$0	$0
Small Businesses	$0	$0	$0
Non-Small Businesses	$0	$0	$0
Other Person	$0	$0	$0
Total Fiscal Costs:	$0	$0	$0
Fiscal Benefits
State Government	$0	$0	$0
Local Government	$0	$0	$0
Small Businesses	$0	$0	$0
Non-Small Businesses	$0	$0	$0
Other Persons	$0	$0	$0
Total Fiscal Benefits:	$0	$0	$0
Net Fiscal Benefits:	$0	$0	$0

 

*This table only includes fiscal impacts that could be measured. If there are inestimable fiscal impacts, they will not be included in this table. Inestimable impacts for State Government, Local Government, Small Businesses and Other Persons are described in the narrative. Inestimable impacts for Non-Small Businesses are described in Appendix 2.

 

Appendix 2: Regulatory Impact to Non-Small Businesses

This proposed new rule is not expected to have any fiscal impacts on non-small businesses revenues or expenditures, because it deals with how individuals who have criminal convictions interact with the Insurance Department. Non-small businesses will not be affected by this rule.

 

The head of the Insurance Department, Commissioner Todd E. Kiser, has reviewed and approved this fiscal analysis.

 

 

R590. Insurance, Administration.

R590-281. License Applications Submitted by Individuals Who Have a Criminal Conviction.

R590-281-1. Authority.

This rule is promulgated pursuant to Subsection 31A-2-201(3) which authorizes the commissioner to adopt rules to implement the provisions of Title 31A.

 

R590-281-2. Purpose and Scope.

(1) This rule sets eligibility requirements for license applicants who have a criminal conviction.

(2) This rule applies to license applicants who have a criminal conviction.

 

R590-281-3. Definitions.

The following definitions shall apply for the purpose of this rule:

(1) "License" means an initial, a renewal, or a reinstated resident individual or resident agency insurance license issued by the commissioner; and

(2) "Proceeding" means a criminal proceeding, including one involving a plea in abeyance, or a regulatory enforcement proceeding.

 

R590-281-4. Eligibility to Apply for a License.

(1) Except as provided in Subsections (2) and (3), and except in the case of a juvenile adjudication, an individual who has been convicted of or pleaded no contest to a felony or a misdemeanor involving fraud, misrepresentation, theft, or dishonesty is eligible to apply for a license if:

(a) the individual has paid in full all fines and interest ordered by the court related to the conviction;

(b) the individual has paid in full all restitution ordered by the court related to the conviction; and

(c) the following time periods have elapsed from the date the individual was convicted or released from incarceration, parole, or probation, whichever occurred last:

(i) seven years in the case of a felony;

(ii) five years in the case of a class A misdemeanor;

(iii) four years in the case of a class B misdemeanor; or

(iv) three years in the case of any other misdemeanor.

(2) An individual may not apply for a license if a proceeding is pending against the individual.

(3)(a) An individual who has been convicted of violating the federal Violent Crime Control and Law Enforcement Act of 1994, 18 U.S.C. Sec. 1033, or who has been convicted of a felony involving dishonesty or breach of trust, may not apply for a license without first obtaining written consent from the commissioner to engage or participate in the business of insurance as provided in R590-278.

(b) An individual who obtains written consent under R590-278 may apply for a license. That individual remains subject to all other license application requirements.

(4) The department will deny a license application submitted by an individual who is not eligible under this Section.

 

R590-281-5. Enforcement Date.

The commissioner will begin enforcing this rule when it takes effect.

 

R590-281-6. Severability.

If any provision of this rule or its application to any person or situation is held to be invalid, that invalidity shall not affect any other provision or application of this rule which can be given effect without the invalid provision or application, and to this end the provisions of this rule are declared to be severable.

 

KEY: insurance, licensing

Date of Enactment or Last Substantive Amendment: 2019

Authorizing, and Implemented or Interpreted Law: 31A-2-201(3)