Use of professional designations in lieuof examination of counselor licenses under the insurance code

Issued and entered September 19, 1990 by Dhiraj N. Shah, Acting Commissioner of Insurance

BACKGROUND

The Bureau has previously issued Bulletin 86-2 and Bulletin 89-4 allowing individuals with certain professional designations to waive all or parts of the examination for insurance counselors licensure.

In addition to the development of new insurance products and marketing licensee of this arrangements, over time the once clear delineations between existing insurance license types have become blurred. This blurring may have occurred in part due to the fact that no administrative rules or guidelines have been promulgated to define of delineate license practice scopes for certain licensees. This blurring may also have occurred as the result of natural forces for change in the license marketplace. The apparent result is that some licensees of this Bureau are engaged in license activities for which they may not have been adequately trained or examined to determine minimum levels of competence.

On June 21 and June 22, 1990, a public hearing was held to elicit comments from the public with respect to any needed changes or modifications in the insurance licensing laws, regulations or procedures in this state.

Both written and oral comments were received at the public hearing recommending that the Bureau discontinue issuing waivers of examination for insurance counselor license applicants. Several professional organizations have argued that achievement of some of the professional designations in the area of financial services does not guarantee that individuals will have a reasonable understanding of provisions, terms, or conditions of insurance policies or the basic understanding of the applicable insurance laws of this state.

Furthermore, the recent contracting out of the development and administration of insurance license tests has resulted in current, valid, nondiscriminatory occupational testing instruments for insurance counselors. The new examinations are specifically designed to measure the minimum competence of an individual to begin providing insurance counseling services to Michigan consumers.

Given the testimony presented at the public hearing, written comments from the industry and the development of new examinations for counselors license applicants, no longer will waivers of examination based on professional designation achievement be issued to insurance applicants for insurance counselor licenses. The Commissioner of Insurance does not require any designation for counselor licensure. Any individual wishing to become licensed as an insurance counselor must apply and pass the written examination.

The requirement that applicants for a counselor license pass a written examination takes effect for all applications received on or after November 1, 1990. This bulletin supersedes Bulletins 86-2 and 89-4.