In regard to the licensing of an individual agent, there are separate procedures for interns and for licensed agents. The procedures for interns are as follows:
1. When the Agents’ Licensing Department receives a request, it sends the applicant a license application form. The form includes a payment coupon for the examination fee.12 2. After the examination fee is paid and the receipt is presented to the Department,
applicants are sent a letter of invitation to the examination.
3. After the examination, the results are sent to the examinees. Those who pass are asked to provide the Department with certification from the agent who will trained them during their internship. Concurrently, the Israel Police are asked to provide a printout of criminal convictions, so that the examinees’ integrity can be studied.
4. If the examinees meet the criteria in Paragraph 25(c)(1)-(2) of the Control Law, they are given an intern’s license in the types of insurance on which they have been examined. The procedures for licensed agents are as follows:
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1. At the end of the internship period (two years), interns are given a one-year extension during which they must pass the licensed agents’ examination. They will automatically— without having to apply—be sent a letter of invitation to the licensed agents’ examination (including a payment coupon for the examination fee).13
2. If the examinees pass the exam and meet the criteria in Paragraph 25(c)(1)-(2) of the Control Law, they will be issued with an agents’ license for the relevant types of insurance. Examinees who fail will automatically be invited to two additional examinations on the types of insurance that they failed.14 Examinees who fail three times must repeat their internship in the respective type of insurance.
PROCEDURES FOR LICENSING AGENCIES
The procedures for licensing agencies are as follows:
1. Presentation of a dossier of documents (some are provided by the Agents’ Licensing Department and others must be obtained by the applicant) as requested, including payment of a nonrecurrent fee for submitting the license application.15 The dossier should include an application form for setting up an agency, a declaration that the intended business manager pledges to act in accordance with the provisions of the law, the agency’s articles of incorporation, etc.
2. Submitting the application to the Agency Licensing Committee for approval. If the application is approved, the applicant will be issued with an authorization to form an agency and register it with the Registrar of Companies.
3. Presentation of additional documents as required, such as the company’s certificate of incorporation, a current printout from the Registrar of Companies with details about the company, agreements concerning contractual relationships with insurance companies and/or the insurance agencies with which the new company is going to be working, etc. 4. Passing the whole application to the Commissioner of Insurance for final approval. If it
is given, the applicant will be issued with an agency license.
13 This assumes, of course, that the examinees paid the intern’s license fee.
14 Agents are entitled to take the licensed agent’s examination in a particular type of insurance three times. 15 The amount is revised on January 1 each year.
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APPENDICES
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Appendix I-1
Agency Licensing Procedures
16There are several stages in authorizing the formation of an agency (including redefining the purpose of an existing company). In the first stage, the following documents must be presented (“Stage One Documents”—they can be obtained from the Department and in the future will be available at the Ministry of Finance’s Web site):
1. application form for forming an agency;
2. declaration of the business manager’s liabilities;
3. statement of shareholders in the case of an insurance company or banking agency; 4. draft articles of the company, including the exclusive goal clause and the mandatory
clauses;
5. printout of criminal convictions of the company’s business manager/s and shareholders, obtained from the police;
6. If any of the company’s founders (shareholders) are companies, a current printout from the Registrar of Companies with details of the company/companies and a chart showing the distribution of holdings in the company being formed;
7. Any other document that, in the opinion of the Department or the Corporate Licensing Committee, should be presented to clarify the identity of applicants and the essence of the application.
The Stage One documents must meet two criteria:
a) The proposed business manager of the company cannot hold the same position at another agency. If the proposed business manager does hold this position at another agency, the company in formation must appoint a different business manager or the business manager will have to resign from the position at the other agency.
b) The types of insurance to which the license application pertains must be identical to those for which the business manager is licensed. (The agency may take on an additional business manager. In other words, if the agency is applying for a license for life insurance and elementary insurance, it may appoint one business manager solely for life insurance and another for elementary insurance).
16 The procedures are periodically revised; for updated information, contact the Agents’ Licensing Department. Likewise, every case is examined on its own merit and additional documents may be required.
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After the Stage One documents have been presented as stipulated, the application is passed to the Corporate Licensing Committee, which decides whether to approve the formation of the agency and the use of the word “insurance” according to Paragraphs 99 and 100 of the Control Law. If the application is approved, the following documents (Stage Two documents) must be presented:1. the company’s certificate of incorporation from the Registrar of Companies; 2. a printout from the Registrar of Companies giving the company’s details;
3. a copy of the company’s articles of incorporation, authorized by the Registrar of Companies in a version approved by the committee;
4. The contract between the company and every insurance company and/or agency with which it will be working. The contract must include the date from which it is valid, the names of the insurance company’s signatories and their positions; a clause obligating the company to keep insureds’ money in a separate bank account; a clause obligating the company to transfer insureds’ money to insurance companies by the 15th of the month following its collection; and an appendix concerning commissions;
5. the name of the accountant who will audit the company’s books.
6. a list of insurance agents who will be employed by the company (if any).
7. If the committee made its approval conditional, the company must meet the conditions stipulated.
After the Stage Two documents are presented as stipulated, the agencies license will be issued.