- Report Published -
|Continuing Education for Agents|
|State Corporation Commission; Bureau of Insurance|
|HJR 272 (Regular Session, 1987)|
House Joint Resolution 272, approved by the 1987 General Assembly, requested the continuation of a study conducted last year by the State Corporation Commission's Bureau of Insurance pursuant to 1986 House Joint Resolution 89 that examined the possibility of creating a continuing education requirement for insurance agents licensed in Virginia. Mandatory continuing education for agents has been a topic of considerable debate for several years. Conflicting positions were asserted again during last year's study, and the issue remained unresolved. The 1987 General Assembly requested, through HJR 272, that the review of the issues be continued.
1986 House Joint Resolution 89
The legislative rationale for reviewing the issue, as stated in HJR 89, is the same for both studies:
1. There have been many changes in the insurance industry in recent years, particularly in the types of insurance products available and their complexity;
2. There have also been numerous changes in the laws governing agents;
3. There is a need for agents who have been licensed for a number of years to become aware of the legislative changes and the types of new products that are available;
4. There is an important need for agents to remain competent in a constantly changing and complex industry; and
5. There is a belief that continuing education requirements would benefit both the public and insurance agents.
An industry advisory committee was formed for the HJR 89 study to assist the Bureau in the development of a continuing education requirement. The HJR 89 industry advisory committee unanimously favored the concept of continuing education as being in the public interest but was divided on the issue of mandatory versus voluntary continuing education. A majority of the industry advisory committee recommended a proposal that would require each agent to complete eight continuing education credits per year. Agents with two or more licenses would have to complete an additional four credit hours for each additional license. The option to pass an examination in lieu of taking courses had been included. The proposal also contained a carryover provision by which credits earned in one year that were in excess of the required number could be applied to meet the requirements of the next year.
1987 Current Study
Because of the unresolved debate over mandating continuing education, no such legislation was proposed during the 1987 Session of the General Assembly. Instead, the General Assembly, under House Joint Resolution 272, requested that the Bureau of Insurance continue to study the possibility of establishing continuing education requirements for insurance agents licensed in this Commonwealth.
The research efforts for the 1987 study focused on the underlying premise of the need for mandatory continuing education that was challenged during the 1986 HJR 89 industry advisory committee meetings. HJR 272, therefore, was designed to ask: Is mandatory continuing education necessary to assure that the agents licensed in this Commonwealth will keep pace with the many changes in products and markets of the insurance industry as well as the numerous changes in Virginia law governing agents? Stated otherwise, in the absence of mandatory requirements, would agents voluntary enroll in continuing education courses in their own and their client's best interest?
A survey was prepared and sent to 3,000 randomly selected life and health and property and casualty agents licensed in the Commonwealth to measure the voluntary efforts on the part of agents to continue their insurance education after they had been licensed. Agents receiving the survey were asked a series of general information questions regarding the type of license held, how long they have been licensed in Virginia, how many companies they represent, whether they belong to a professional association, and whether they have any insurance-related designations.
The agents were then asked specifically if they had participated in any insurance-related education courses/seminars/workshops in the last three (3) years either formally outside of the agency or formally/informally within the agency. The agents were asked to provide as much information as possible regarding each course taken. This course information included title and content of the course, name of organization offering the course, location (inside or outside agency), length of course (number of hours), teaching method (classroom or self-study), and whether the course was required by the agent's agency, company or association. The agents were also asked a general opinion question about the continuing education requirement that was developed in 1986 .pursuant to HJR 89.
Thirty-two percent (1,039) of the surveyed agents responded. The results indicate that a majority of the agents completing the survey (59%) have participated over the last three years in the type of education that would address the underlying motivation for requiring continuing education. In other words, they participated in courses directed at learning about products and types of coverages that are available. An additional 12% of the agents responding to the survey indicated that they had only taken courses that would not be considered appropriate for meeting a mandatory continuing education requirement. These courses included sales techniques, career training, and staff management, as well as prelicensing courses which are not considered continuing education but are requirements for licensure.
The survey results also indicated that 44% of the courses taken were required by the agents' company, agency, professional agents' association, or the state. In addition, association members appeared to be more motivated to enroll in education courses than non-members. More than two-thirds (68%) of agents responding to the survey who are members of a professional agents' association participated in insurance-related continuing education courses in the last three years. Only one-half of the agents not belonging to an association made the same claim.
The Bureau of Insurance supports the concept of continuing education to assure that licensed insurance agents are providing the Virginia consumer with up-to-date and accurate knowledge of the insurance product. Although 61% of the agents surveyed responded in favor of a continuing education requirement, the Bureau recognizes the concerns of those opposed to mandated education, as well as the widely varying views of those in favor. In addition, the Bureau agrees with some of those agents in favor of continuing education who believe that if a requirement is to be mandated, the criteria should be stronger than those proposed under HJR 89.
In reviewing the survey results, the information that was received establishes the educational activity of agents who are experienced, career-oriented and engaged in professional activities such as obtaining designations and joining agents associations. Based on the research, the Bureau concludes that voluntary continuing education appears to be operative for this segment of the agent population but that insufficient documentation exists to support this conclusion for all agents. The Bureau recommends that, for now, companies, agencies, trade associations, and agents be called upon, not only to continue their efforts toward voluntary education, but to expand the opportunities, particularly in the areas of insurance law and ethical trade practices. The Bureau will monitor the education activities of insurance agents in general to determine whether voluntary efforts are sufficient, or whether a future review of mandated continuing education is warranted.