State Of Ohio DEPARTMENT OF INSURANCE 2100 Stella Court, Columbus, Ohio 43215 (614) 644-2658        www.ohioinsurance.gov	Bob Taft, Governor J. Lee Covington II, Director

Testimony of
Holly Saelens, Assistant Director, Policy and Legislation
The Ohio Department of Insurance
Before
The Ohio Senate Insurance, Commerce and Labor Committee
Thursday, November 15, 2001
On
Substitute Senate Bill 129, the Agent Licensing Model Act

Mr. Chairman and members of the Committee:

My name is Holly Saelens and I am the Assistant Director for Policy and Legislation for the Ohio Department of Insurance. On behalf of Director Lee Covington, I am again pleased to be here to discuss the new substitute SB 129. The product before you today is the result of more than 5 months of work by the various stakeholders impacted by SB 129 as well as the intense efforts over the last month of stakeholders regarding the "Safe Harbor" provisions which was included in the last substitute bill. I would like to express my appreciation to those individuals (which I have included in an attachment to my testimony) as well as the efforts of Ms. Crista Colasante and Ms. Stephanie Kaylor of Senator Nein's office and Ms. Jennifer Parker of the Legislative Service Commission. The work of these stakeholders produced a consensus on the agent licensing provisions of the bill and led to significant improvements on the Safe Harbor language in the bill.

In summary, the new substitute bill reflects the following changes to the agent licensing sections:

• Various technical clean ups and clarifications to agreed upon language;
• Revisions to the surety bond requirement to maintain the current law for surplus lines brokers;
• Revisions to the language regarding solicitors that are a type of appointment now limited to licensed property, casualty, personal lines, or title agents.

As mentioned, the last substitute bill includes language commonly referred to as the "The Safe Harbor language." The Safe Harbor language allows the Ohio Department of Insurance to monitor the sale of insurance products by persons that lend money or extend credit. Congress, in drafting GLBA, expressly reserved the right of states to monitor these activities.

Many of these "persons" include banks, savings and loans, credit unions, and consumer finance organizations. With the passage of GLBA and the elimination of the barriers between banking and insurance companies, these lenders will proactively pursue customers who want to purchase insurance products. The Safe Harbors will ensure the consumer is fully informed about their options in regard to purchasing insurance during a loan transaction, that the choice of insurance agent does not affect credit decisions as well as disclosures that the insurance product is not insured by the bank or any government institution or program.

Again, I would like to thank all of those individuals involved, members of the committee, and the Chairman and sponsor, Senator Nein for working with the Department and ensuring that we address the threat of federal regulation of insurance.

This concludes my testimony and I would be happy to answer any questions.