CHAPTER 114.

INSURANCE-STATE INSURANCE BOARD-POWERS AND DUTIES.

(HOUSE BILL No. 70.)

AN ACT creating a State Insurance Board, providing for the regulation and control of rates of premiums on insurance and to prevent discriminations therein, and the granting and revoking insurance agents' license and repealing all laws or parts of laws in conflict herewith, and declaring an emergency.

Be It Enacted by the People of the State of Oklahoma:

Board Created-How Constituted.

Section 1. There is hereby created the State Insurance Board composed of the Insurance Commissioner, the State Fire Marshal as ex-officio members and a third member to be appointed by the Governor, by and with the advice and consent of the Senate, who shall be secretary of the said Board, the said Insurance Commissioner to be President of the State Insurance Board. The State Insurance Board shall have authority and supervision and regulation over fire, tornado and plate glass insurance rates, and rates of insurance for legal liability of employes and rating bureaus and the granting and revoking of insurance agents' license as is provided by this Act.

Insurance Companies to File Schedules.

Section 2. That every fire, tornado and plate glass insurance company and every insurance company granting insurance against the liability of the employers shall file with the said. board a general basis schedule, showing the rates on all classes of risk insurable by such fire, tornado and plate glass insurance company or legal liability insurance company in this state and all charges, rates, terms, privileges and conditions which in any way might affect such aforesaid rates or the value of the insurance as issued to assured.

Notice of Change in Schedules.

Section 3. No change shall be made in the schedules which have been filed in compliance with the requirements of this Act except after ten days' notice to said board, which notice shall plainly state the changes to be made in the schedules then in force and the time when such changes shall go into effect, and such change shall be shown by filing new schedules or shall be plainly indicated on the schedules then in force: Provided, that said board may, for good cause, shown, allow changes upon less

time than the notice specified herein, either in particular instances or by general order applicable to special or peculiar circumstances or conditions.

Control of Rates.

Section 4. When said Board shall determine that any rate made by such insurance company in this state is excessive or unreasonably high, or that said rate is inadequate to the safety or soundness of the company granting the same, it is authorized to direct said company to file a higher or lower rate, commensurate with the risk, but in every case the rate shall be reasonable.

Authority to Transact Business-Schedule Rates.

Section 5. No insurance company shall engage in the insurance of any property, or against the legal liability of employers in this state, unless the schedule of rates under which property of such liability is insured has been filed in accordance with the provisions of this Act, nor shall any fire, tornado and plate glass insurance company or any liability insurance company write any insurance at a rate different from that named in this schedule or remit or refund in any manner or by any device any portion of the ratés so established or extend to any person any privileges or inducements except as specified in such schedule.

Duty of Company in Case No Rate Is Filed.

Section 6. Any fire, tornado and plate glass insurance company or liability insurance company entering into any contract of insurance on property located in this state, or against the liability of employers in this state, for which no rate has been filed, as provided by section 2 of this Act, shall, within thirty days after entering into such contract, file with the secretary of said board, in such form as may be required of him, a schedule of such property or liability, showing the rate thereon and such information as may be required by such board. Such schedule shall conform to the general basis as is provided in section 1 of this Act, and when filed, shall constitute the premium rate of such company for the described property or liability.

Schedules Open to Inspection.

Section 7. That all schedules and insurance rates filed in accordance with the provisions of this Act shall be open to inspection of the public.

Discrimination in Rates Prohibited.

Section 8. That no fire, tornado and plate glass. insurance company or legal liability insurance company shall directly or indirectly, by any special rate, tariff, rebate, or other different charge, collect or receive from any person or persons a greater or less or different compensation for the insurance of any property located, or such liability in this state than it charges, demands, collects or receives from any other person or persons for like insurance for risk of a like kind and hazard under similar circumstances and conditions in this state; and any fire, tornado and plate glass insurance company or legal liability insurance company violating the provisions of this act shall be deemed guilty of unjust discrimination, which is hereby declared to be unlawful.

Agents Classified-Qualification.

Section 9. There shall be three classes of agents under this act, defined as follows:

Special Agents shall be persons who appoint policy writing and soliciting agents and otherwise supervise the business of the company, but who shall not have authority to countersign policies.

Policy Writing Agents shall be persons who solicit insurance and countersign policies.

Soliciting Agents shall be persons who solicit insurance but who do not have authority to countersign policies.

Provided, in case. of fire, tornado, plate glass or liability insurance, such soliciting agents must office with and be in the sole employ of a policy writing agent and whenever they cease officing with and being in the sole employ of the policy writing agent, such license is automatically cancelled and such policy writing agent shall report same at once in writing to the State Insurance Board.

Provided, further, this section shall not apply to domestic mutual insurance companies.

Agent's License-Fee-Cancellation-Agent's Requirements.

Section 10 (a).

Upon a written notice of any insurance company licensed under the laws of this state, of the appointment of any person to act as its agent within this state, accompanied by a written application on a form prescribed by the State Insurance Board, shall, if it finds the agent qualified, competent and suitable, issue to such persons a license which shall state in sub

stance that the insurance company making the application is authorized to do business in this state, and that the person appointed and named therein is to be an agent of the company, which license shall state whether the person licensed is a special agent, policy writing agent, or soliciting agent. Provided, that a license. fee of three ($3.00) dollars shall accompany such appointment by any foreign insurance company and fifty cents for each appointment for any domestic insurance company, which license fee collected shall be reported and paid to the State Treasurer the same as fees and taxes as collected from insurance companies; any such license issued shall continue in force until the last day of April next after its issue or until sooner revoked by the State Insurance Board for cause or until the company by written notice to the State Insurance Board cancels the agent's authority to act for it. Provided, that whenever the agency of a policy writing agent is discontinued, the company shall give immediate written notice of same to the State Insurance Board. Provided further, that exchange of business between policy writing agents for the same class of insurance is hereby permitted.

(b) The State Insurance Board, in determining if the agent is entitled to a license, shall take into consideration his experience in the insurance business, ability to be a competent agent, and the general reputation and character of the agent as to honesty, integrity and responsibility. After the filing of application for license, the State Insurance Board shall promptly proceed with its investigation of such application and will forthwith procure all information necessary to satisfy itself that such applicant would make a competent and reputable agent, and if such State Insurance Board shall be unable to satisfy itself, and shall see fit for any cause hereinafter in this section set forth, decline to issue and reject said application, the said board shall forthwith in writing file with said Insurance Company making such application a full and complete statement of its reasons for declining to issue such license, and a copy of such notice of rejection shall be mailed to the person desiring to be appointed such. agent.

(c) It is provided further that the State Insurance Board shall only cancel any license issued by it after a hearing before the said State Insurance Board, on charges made in writing and after a copy of said charges have been mailed to the said agent

at his last known address and giving him ten days' notice for appearance. Charges as filed must set forth some violation of the Insurance laws of this state, or that the agent has through his said agency defrauded some policy holder or that he lacks sufficient ability to properly conduct the business of insurance or that he is incompetent or has made use of misrepsentations, twisting or other bad practices in the conduct of his insurance business, after such hearing of the charges made, the State Insurance Board shall render its opinion in writing and if it deems the charges sufficiently proven to be true, shall forthwith cancel the said license and shall notify the said agent and the said company of its findings. Any insurance company, foreign or domestic, which shall require any person, as a condition precedent to his appointment as agent or as condition to retaining its agency to refuse or surrender the agency of any authorized and duly licensed domestic insurance company of this state shall forfeit its authority to do business in this state and every person concerned in making such requirements or communicating the same to such local agent, directly or indirectly, shall be guilty of a misdemeanor and be subject to a fine not to exceed one thousand ($1,000.00) dollars and the company so offending shall be subject on conviction to a fine not exceeding one thousand ($1,000.00) dollars.

Agent Must Engage in Insurance Business.

Section 11. No license shall be issued to any person when the State Insurance Board believes the applicant does not intend to engage actively in the insurance business, but desires the license. principally for the purpose of securing a commission or any part thereof on property under his control, or in which he may be interested in any manner whatsoever.

Policy Issued by Resident Agent-Foreign Insurance-Tax.

Section 12. No policy of insurance shall be issued or delivered in this state by any foreign insurance company licensed to transact business in this state except through an agent who shall be a resident of this state and holds a certificate of authority for the kind of insurance affected by such policy which shall be countersigned by a policy writing agent who shall receive the full commission allowed by the company on such policy and which shall not be divided with any non-resident. Provided, that upon every policy of insurance covering property in this