FOR IMMEDIATE RELEASE: December 20, 1996

LANSING -- Michigan Insurance Commissioner D. Joseph Olson issued an order today reducing regulatory costs paid by insurance agents, taxpayers and consumers by more than $16 million a year. The order waives mandatory continuing education (C.E.) requirements for agents for whom the costs of the program exceed the benefits it provides.

The order leaves the continuing education program intact for agents who wish to pursue C.E. course work voluntarily. The order also continues to mandate course work for any Michigan agent who has a non-resident agent license in a state that continues to mandate C.E.

The order was issued in accordance with the Public Act 1 of 1992 (Act) which created the mandatory education program. In the Act, the legislature permitted the commissioner to waive enforcement of the state-approved courses if the required course work would cause a severe hardship. Two prior commissioners had found examples of severe hardship and both issued orders providing exemptions for affected groups of agents. Commissioner Olson's order is consistent with the prior orders and it was based on testimony provided by interested parties at a public hearing held on October 28, 1996.

With the one exception noted below, none of the advocates for the state-mandated program could offer reliable evidence to show that the program confers benefits on the agents or the public. Insurance Bureau records indicate that serious agent misconduct has remained constant despite a reduction in the number of licensed agents since the program (costing $16 million annually) was introduced.

The Commissioner found that benefits from the CE program do accrue to agents having non-resident licenses in other jurisdictions that have continuing education requirements. This is because they can meet those states' requirements by complying with Michigan's CE requirements, thereby saving them from having to either forego licensure in other states or incur the expense of time away from work and travel to complete the course work for those jurisdictions.

The Commissioner determined that, due to the significant benefit of the program to agents with non-resident licenses, maintaining the program for these agents was preferable to requesting that the Legislature repeal the requirement.

The order is effective on January 1, 1997. All agents renewing licenses before that date must still show compliance with the requirements.