Guam § 15711 - Application for License; to Whom License May be

§ 15711. Application for License; to Whom License May be

Issued.

(a) Definitions.

(1) In this Section, “person” means an individual or

business entity. The term “partnership” or “agency

partnership,” as used in this Section, means a general

partnership or a registered limited liability partnership.

(2) In this Section, the term “corporation” shall mean a

corporation organized under the general corporation laws of

Guam, or a Guam domiciled limited liability company

organized or existing under Guam’s Limited Liability

Company Act having its principle place of business on Guam

and having as one (1) of its purposes the authority to act as

an insurance agent. The licensing and regulation of a limited

liability company shall be subject to the same provisions and

requirements of this Article that are applicable to

corporations licensed under this Article.

(3) In this Article, “bank” means a national banking

association organized and existing under the National Bank

Acts (12 U.S.C. § 21, et seq.); a state bank organized and

existing under the banking laws of Guam; a Savings Bank

organized and existing under the banking laws of Guam; and

a bank branch, or a bank operating subsidiary, as defined by

Guam or Federal law, that is located and doing business on

Guam.

(b) Application for License; to Whom License May be

Issued.

(1) Any person, corporation or bank that desires to

become an agent for a local mutual aid association, a local

mutual burial association, a government mutual assessment

corporation, a government mutual insurance company, a

casualty company writing accident and health insurance

company, or any other type of insurance carrier licensed to

do business on Guam, the agents of which are required to be

licensed under this Article, shall submit to the Department an

application for a license in the form required by the

Department.

(2) The application must bear a signed endorsement by

an officer, or properly authorized representative of the

insurance carrier, that the individual applicant or the

responsible officer and employee of the bank is qualified to

hold that individual, the partnership or the bank out in good

faith to the general public as an insurance agent, and that the

insurance carrier desires that the applicant act as an insurance

agent to represent it on Guam.

(3) The Department shall issue a license to an individual

or to a general partnership or corporation engaging in the

business of insurance. Nothing contained herein shall be

construed to permit any unlicensed employee or agent of any

corporation to perform any act of an agent under this Article

without obtaining a license.

(4) The Department shall issue a license to a bank if the

Department finds that:

(A) the bank satisfies the definition of this Article;

(B) at least one (1) officer of the bank and each

individual who will be performing any acts as an agent

for the bank are individually licensed under this Article;

(C) the bank shall pay gross receipt taxes on the

commission, fee income or income it receives; provided,

that should there be any law in conflict with this

provision, that this Section shall control in so far as it

deals with income derived from activities related to the

business of insurance; and

(D) the bank will have the ability to pay any sums

up to Twenty-five Thousand Dollars ($25,000.00) that

it might become legally obligated to pay on account of

any claim made against it by a customer and caused by

a negligent act, error or omission of the bank, or any

person for whose acts the bank is legally liable in the

conduct of its business under this Article.

(c) Banks shall not force or induce any customer into buying,

transferring or rolling over any insurance coverage in favor of

coverage which the bank will directly or indirectly receive a fee

income, commission or income.

(d) Banks may sell insurance and may replace, transfer or

rollover coverage if it is in the best interest of the customer to do

so. The term “best interest” shall include, but not be limited to: an

explanation between the coverage and price of a product the bank

is offering versus the coverage the customer currently has in force.

Comparing companies financial strength shall not be permitted, or

any other activity in violation of this Title. The term “customer”

means any person, firm or corporation to whom the bank sells, or

attempts to sell, a policy of insurance, or from whom the bank

accepts an application for insurance.

(e) That ability shall be proven through:

(1) an errors and omissions policy insuring the bank

against errors and omissions in at least the sum of One

Hundred Thousand Dollars ($100,000.00) with not more than

a Ten Thousand Dollar ($10,000.00) deductible feature,

issued by an insurance company licensed to do business on

Guam, or if a policy cannot be obtained from a company

licensed to do business on Guam, a policy issued by a

company not licensed to do business on Guam upon filing an

affidavit with the Department stating the inability to obtain

coverage;

(2) a bond executed by the bank as principal and a surety

company authorized to do business on Guam, as surety, in

the principal sum of Twenty-five Thousand Dollars

($25,000.00), payable to the Department for the use and

benefit of customers of the bank, conditioned that the bank

shall pay any final judgment recovered against it by a

customer; or

(3) a deposit with the comptroller of cash or securities,

with a fair market value of Twenty-five Thousand Dollars

($25,000.00).

(f) The comptroller shall accept and receive the deposit and

hold it exclusively for the protection of a customer of the bank

who recovers a final judgment against the bank. The deposit may

be withdrawn only upon filing with the Department satisfactory

evidence that the bank has withdrawn from the business of

insurance and has no unsecured liabilities outstanding, or that the

bank has provided for the protection of its customers by furnishing

an errors and omissions policy, or a bond, as provided by this

Subsection.

(g) Securities so deposited may be exchanged from time to

time for other qualified securities. A binding commitment to issue

such a policy or bond, or the tender of applicable securities, is

sufficient in connection with an application for license. Nothing

in this Subsection permits an unlicensed employee or agent of a

bank to perform any act of an agent under this Article without

obtaining a license, except that no bank, partnership, corporation

or any other legal business entity needs to procure an insurance

license to sell credit life, mortgage life or personal accident

insurance.

(h) A bank licensed as an agent under this Article must

maintain the insurance records of the bank, including all files

relating to customer complaints, separate from records relating to

the banking transactions of the bank. If at any time a bank that

holds an agent’s license does not maintain the qualifications

necessary to obtain a license, the license of that bank to act as an

agent shall be canceled or denied in accordance with this Article.

Each bank licensed as an agent under this Article shall file under

oath with its application for license renewal a list of the name and

address of each individual who will be acting as an agent on behalf

of the bank.