Section 402:74 Controlled Insurance; Prohibited Interest.
I. It is the policy of this state that an insurance agent or an insurance company should not be licensed to act or do business primarily for the purpose of placing insurance on his or its own property or on property which is owned or controlled in any manner by employees or close relatives of the agent or of the company or owners of the company, and it is the purpose of this section to further that policy.
II. If any applicant for a license from the commissioner of insurance to act as an insurance agent or to do insurance business in the state receives in any calendar year more than 10 percent of his or its total commissions or premiums from insurance that the agent or company writes in that year, from any insurance involving in any way the property or any interest in property of the persons, associations, or corporations listed in paragraph III of this section, the agent or company is deemed to be licensed primarily for the purpose of insuring his or its own property or of insuring property which is owned or controlled to some extent by employees or close relatives of the agent or of the company or owners of the company, and the commissioner shall not issue him or it a license unless the agent or company shows to the satisfaction of the commissioner that he or it is not so licensed.
III. If the property insured by an applicant is owned by any of the persons listed in this paragraph, the commissioner shall not issue a license to the applicant unless the applicant shows to the satisfaction of the commissioner that the applicant is not licensed contrary to the policy of the state as set forth in paragraph I of this section.
(a) an applicant;
(b) any member of any firm or association if an applicant is also a member or owner;
(c) an owner of any interest in an association or partnership which is an applicant and the spouse of such an owner;
(d) the stockholders of a corporation which is an applicant and their spouses;
(e) any corporation owning an interest in a corporation which is an applicant;
(f) any firm or association, its members or owners and their spouses who individually or collectively own more than 50 percent of the capital stock of a corporation which is an applicant;
(g) any corporation if any firm or association, its members or owners or their spouses own more than 50 percent of the capital stock of a corporation which is an applicant;
(h) any corporation if an applicant or the applicants, individually or collectively, own more than 50 percent of its capital stock;
(i) any affiliate or subsidiary of any corporation mentioned in this paragraph;
(j) an employee or an employer of an applicant;
(k) any person for whom an applicant is or acts as trustee;
(l) any company if the property insured is manufactured, sold or financed by the company, unless the insurance protects the insured against a physical damage to an automobile manufactured, sold, or financed by the company to the insured;
(m) the employees of a corporation which owns the controlling interest in an applicant, if over 10 percent of the commissions or premiums received by the applicant come from the employees of the corporation.
IV. The provisions of this section do not apply to an agent licensed as of the effective date of this section.
Source. 1967, 373:1, eff. Sept. 1, 1967.