§ 10-201. Definitions.
(a) In general.- In this
subtitle the following words have the meanings indicated.
(b) Adviser.-
"Adviser" means a person that, for compensation:
(1) examines or offers to examine a policy, annuity contract, or pure endowment contract for the purpose of giving, or gives or offers to give, advice or information about:
(i) the terms, conditions, benefits, coverage, or premium of a policy, annuity contract, or pure endowment contract; or
(ii) the advisability of changing, exchanging, converting, replacing, surrendering, continuing, or rejecting a policy, annuity contract, or pure endowment contract or of accepting or procuring a policy, annuity contract, or pure endowment contract from an insurer; or
(2) represents to the public that the person gives or is engaged in the business of giving advice or information to holders of policies or annuity contracts by use of the title "insurance adviser", "insurance specialist", "insurance counselor", "insurance analyst", "policyholders' adviser", "policyholders' counselor", "refund company", or other similar title:
(i) in or on advertisements, cards, signs, circulars, letterheads, or elsewhere; or
(ii) in any other manner in which public announcements are made.
(c) License.- "License" means a license issued by the Commissioner to act as an adviser.
§ 10-202. Scope of subtitle.
(a) Definitions.-
(1) In this section the following words have the meanings indicated.
(2) "Guaranteed investment contract" means an agreement between an insurer and an entity listed in subsection (b)(5)(ii)2 of this section that:
(i) permits withdrawals by the purchaser for specified purposes; and
(ii) contains a general obligation of the insurer to repay a deposit plus interest.
(3) "Synthetic investment contract" means an agreement between an insurer and an entity listed in subsection (b)(5)(ii)2 of this section that:
(i) permits withdrawals by the purchaser for specified purposes; and
(ii) contains a limited obligation of the insurer to repay a deposit plus interest that is supported by a portfolio of fixed income securities identified in the agreement and owned by the purchaser.
(b) Applicability.- This subtitle does not apply to:
(1) an officer, employee, insurance producer, or other representative of an authorized insurer while acting for the authorized insurer;
(2) an insurance producer that holds a license while acting as an insurance producer for a client;
(3) an attorney at law of the State while acting within the scope of the legal profession;
(4) a licensed public adjuster while acting within the scope of the public adjuster's license; and
(5) an individual:
(i) who is employed by an investment adviser registered with the Securities and Exchange Commission;
(ii) whose only clients in the State each:
1. has assets of not less than $5,000,000; and
2. is one of the following types of institutional investors, whether acting for itself or as a trustee or fiduciary with investment control:
A. an investment company, as defined in the Investment Company Act of 1940;
B. an investment adviser registered with the Securities and Exchange Commission;
C. an adviser, as defined in § 10-201 of this subtitle;
D. a federal covered adviser, as defined in the Maryland Securities Act, Title 11 of the Corporations and Associations Article;
E. a broker-dealer;
F. a bank, trust company, or savings and loan association;
G. a collective investment fund or common trust fund maintained by a bank or trust company;
H. an insurer;
J. a governmental agency or instrumentality; or
K. any other type of institutional investor, as designated by the Commissioner; and
(iii) whose business activities in the State that would otherwise be subject to regulation under this subtitle are limited to acting as an adviser with respect to guaranteed investment contracts or synthetic investment contracts.
(c) Coverage under Life and Health Insurance Guaranty Corporation Act.- This section may not be construed to afford coverage for guaranteed investment contracts or synthetic investment contracts under the Life and Health Insurance Guaranty Corporation Act, Title 9, Subtitle 4 of this article.
§ 10-203. License required;
exception.
(a) In general.- Except as otherwise provided in this subtitle, a person must obtain a license before the person acts as an adviser in the State.
(b) Exception.- An insurance producer or other representative of an authorized insurer that, while acting for an authorized insurer, uses a title similar to those listed in § 10-201(b)(2) of this subtitle in close conjunction with all or part of the name of the authorized insurer need not obtain a license if the insurance producer or other representative certifies to the Commissioner that the insurance producer or representative has completed successfully a course submitted to and approved by the Commissioner.
§ 10-204. Qualifications of
applicants.
(a) In general.- To qualify for a license, an applicant must be an individual who meets the requirements of this section.
(b) Trustworthy and competent.- An applicant must be trustworthy and competent to act as an adviser so as not to jeopardize the public interest.
(c) Qualifications for license.- A license may be issued to:
(1) a resident of the State who takes and passes the examination required under subsection (d) of this section;
(2) a resident of the State who:
(i) is a member in good standing of the Society of Actuaries or the Casualty Actuarial Society;
(ii) has been conferred the Chartered Property Casualty Underwriter (C.P.C.U.) designation by The American Institute for Property and Liability Underwriters, Inc. and is a member in good standing of the Society of Chartered Property and Casualty Underwriters;
(iii) has been conferred the Chartered Life Underwriter (C.L.U.)
designation by The American
(iv) has been conferred the Certified Employee Benefit Specialist (C.E.B.S.) designation by the International Foundation of Employee Benefit Plans and is a member in good standing of the International Society of Certified Employee Benefit Specialists;
(v) is currently certified by the Certified Financial Planner Board of Standards to use the marks Certified Financial Planner and CFP; or
(vi) has completed successfully a course of study equivalent to any course of study required for membership in good standing in any society or professional entity listed in items (i) through (v) of this item as approved by the Commissioner and has been conferred the Certified Insurance Counselor designation by The Society of Certified Insurance Counselors; or
(3) (i) a nonresident of the State who is licensed as an insurance adviser in the nonresident's state of residence; or
(ii) if the Commissioner determines that the applicant is otherwise
qualified to act as an insurance adviser, a nonresident of
1. an insurance adviser's license; or
2. the equivalent of an insurance adviser's license.
(d) Examination; certification by nonresidents.-
(1) The Commissioner shall determine the trustworthiness and competency of each applicant to act as an adviser in the State.
(2) To determine the trustworthiness and competency of an applicant described in subsection (c)(1) of this section, the Commissioner shall require the applicant to take and pass, to the satisfaction of the Commissioner, an examination.
(3) A nonresident applicant shall satisfy the Commissioner of the applicant's trustworthiness and competency by filing a certification from an appropriate official of the applicant's state of residence certifying that the applicant holds a currently valid license or certificate to act as an insurance adviser in the applicant's state of residence.
(e) Fees.-
(1) Before taking the examination required under subsection (d) of this section, an applicant shall pay the application fee required by § 2-112 of this article.
(2) After an applicant has been notified that the applicant has passed the examination, the applicant shall pay the applicable license fee required by § 2-112 of this article.
(3) An applicant who is not required to take an examination shall pay the applicable license fee required by § 2-112 of this article.
§ 10-205. Applications for licenses.
An applicant for a license shall file with the Commissioner an application on the form that the Commissioner provides.
§ 10-206. Bond required.
An applicant for a license shall file with the Commissioner a bond
that:
(1) is approved by the Commissioner as to form and sufficiency of
security;
(2) is executed by the applicant and an authorized surety insurer;
(3) is in the penal sum of $1,000;
(4) is conditioned on the applicant faithfully performing the duties
of an adviser;
(5) runs to the State; and
(6) specifically authorizes the State to recover the penal sum of the
bond if the applicant is guilty of fraudulent or dishonest practices while acting as an
adviser.
§ 10-207. Issuance of
license.
The Commissioner shall issue a license to each applicant who meets
the requirements of this subtitle.
§ 10-208. Scope of license.
A license does not authorize the licensee to:
(1) adjust losses; or
(2) receive compensation from an insurer or insurance producer for the sale or placement of insurance.
§ 10-210. Conducting business
as sole proprietorship, partnership, association, or corporation.
A licensee may conduct an insurance advisory business as a sole proprietorship, partnership, association, or corporation if:
(1) each individual who acts as an adviser is licensed under this subtitle; and
(2) the trade name of the business is registered with the Commissioner.
§ 10-211. Term and renewal of
license.
(a) Term of license.- A
license expires at the end of every other June 30 unless it is renewed for a 2-year term
as provided in this section.
(b) Renewal notice.- At least 1 month before a license expires, the Commissioner shall mail to the holder of the license, at the last known address of the holder:
(1) a renewal application form; and
(2) a notice that states:
(i) the date by which the Commissioner must receive the renewal application for the renewal to be issued and mailed before the license expires; and
(ii) the amount of the renewal fee.
(c) Application for renewal.- Before a license expires, the holder of the license periodically may renew it for an additional 2-year term, if the holder:
(1) otherwise is entitled to a license;
(2) files with the Commissioner a renewal application on the form that the Commissioner provides;
(3) pays to the Commissioner the renewal fee required by § 2-112 of this article;
(4) is in compliance with the bond requirement of § 10-206 of this subtitle; and
(5) if the Commissioner determines that an examination is advisable to determine the trustworthiness or competence of a holder, passes an examination given by the Commissioner.
(d) Application considered timely.- An application for renewal of a license shall be considered made in a timely manner if it is postmarked on or before June 30 of the year of renewal.
(e) Issuance of renewal; effect of filing application.-
(1) The Commissioner shall renew the license of each holder who meets the requirements of this section.
(2) If the holder of a license files an application for renewal before the license expires, the license shall remain in effect until:
(i) the Commissioner issues a renewal license; or
(ii) 5 days after the Commissioner refuses to renew the license and gives notice of the refusal to the holder.
§ 10-211.1. Reinstatement of
license.
(a) Authorized.- On or before September 30 of the renewal year, a person whose insurance adviser's license has expired may reinstate the expired license by:
(1) filing with the Commissioner the appropriate reinstatement application;
(2) paying to the Commissioner the applicable reinstatement fee required under subsection (b) of this section; and
(3) complying with the bond requirement of § 10-206 of this subtitle.
(b) Fee.-
(1) The fee for a reinstatement under this section shall be
(i) the amount charged for a full renewal period for the type of license held by the person seeking the reinstatement; and
(ii) 1. $25 for reinstatement during the period from July 1 through July 31;
2. $50 for reinstatement during the period from August 1 through August 31; and
3. $75 for reinstatement during the period from September 1 through September 30.
(2) The Commissioner may limit the reinstatement fee to the amount of the renewal fee in cases where the reinstatement applicant did not make timely renewal because of temporary incapacity, hospitalization, or other hardship.
(c) Effect of expired license.- A person whose insurance adviser's license has expired is prohibited from acting as an insurance adviser until the effective date of reinstatement of the license.
(d) Failure to reinstate.- A person who does not comply with subsection (a) of this section on or before September 30 of the year of expiration shall apply for an insurance adviser's license under § 10-205 of this subtitle and meet any other requirements specified by the Commissioner in regulation.
(e) Regulations.- The Commissioner may adopt regulations to carry out this section.
§ 10-212. Suspensions and
revocations.
(a) In general.- Subject to the hearing provisions of Title 2 of this article, the Commissioner may suspend or revoke a license if the licensee:
(1) has violated this article;
(2) has violated any law while acting as an adviser;
(3) has made a material misstatement in the application for the license;
(4) has been guilty of fraudulent or dishonest practices; or
(5) has demonstrated incompetency or untrustworthiness to act as an adviser.
(b) Filing complaint.-
(1) Any licensee or any person aggrieved may file with the Commissioner a verified complaint that states facts that show sufficient grounds to suspend or revoke a license.
(2) On the filing of a complaint, the Commissioner, after notice and hearing, shall determine whether to suspend or revoke the license.
(c) Effect of revocation.- An adviser whose license has been revoked may not obtain another license or renew a license for at least 1 year after:
(1) the date of revocation, if there is no judicial review; or
(2) the final determination in the judicial proceeding confirming the revocation, if there is judicial review.
§ 10-213. Notice of denial,
suspension, or revocation
If an application for a license is denied or a license is suspended or revoked, the Commissioner immediately shall give notice to the applicant or licensee by registered mail addressed to the applicant's or licensee's last address of record with the Commissioner.
§ 10-214. Information
required by Commissioner.
(a) In general.- The Commissioner at any time may require a licensee to provide information that the Commissioner considers necessary about the business methods, policies, contracts, or transactions of the licensee.
(b) Provision of information.- Within 10 days after receiving a written request for information under this section, the licensee shall provide the Commissioner with the information in the form that the Commissioner requires.
§ 10-215. Agreements between
advisers and others.
(a) In general.- An agreement between an adviser and another person that relates to the giving of advice or information of the type given by advisers is not enforceable by or for the adviser unless:
(1) the agreement is in writing;
(2) the agreement is executed personally in duplicate by the person to be charged or by the legal representative of the person;
(3) a duplicate of the agreement is delivered to and kept by the person when it is signed by that person;
(4) the agreement plainly states the amount of the fee paid or to be paid by the person and the services to be performed by the adviser; and
(5) the agreement is in the form that the Commissioner currently approves.
(b) Approval of forms.-
(1) All forms of statements, receipts, and agreements used by licensees must be filed with and approved by the Commissioner as:
(i) conforming to the requirements of this section;
(ii) not inconsistent with law; and
(iii) not misleading in any way.
(2) The Commissioner may disapprove a form if the Commissioner finds that the form:
(i) contains any provision or any title, heading, backing, or other indication of its contents that is likely to be misleading; or
(ii) omits any provision that the Commissioner requires to make the form clear and not misleading.