Chapter 15 (licensing) Part 1
Maintaining record of notice of appointment
A producer must receive and maintain written documentation of all the insurers that have appointed the producer.
Address/and or name changes
In order for an insurance producer to change, add to, or delete information from a license, the insurance producer must file the proper form with the Commissioner. An insurance producer must notify the Commissioner within 30 days of any change in legal or trade name or address. Failing to do so is a violation of Maryland insurance laws punishable by possible license denial, suspension, revocation, or nonrenewal.
Waiver of procedures
The Commissioner may waive the reinstatement procedures of this section for a producer who is unable to comply with the renewal and reinstatement procedures due to military service or other extenuating circumstances, including a long-term medical disability.
Examination
The applicant must pass an examination to determine competency regarding: Property insurance Casualty insurance Familiarity with the applicable Maryland state laws An applicant who fails an examination may not take another until at least 14 days after the date of the last failed exam.
Exemptions to Licensure
The producer licensing requirements do not apply to: An insurer An officer, director, or employee of an insurer or of an insurance producer who does not receive any commission on policies written or sold An individual who performs administrative services related to mass marketed property and casualty insurance, provided that no commission is paid to the individual for the services An employee of an insurer or organization employed by an insurer who is engaged in the inspection, rating, or classification of risks or in the supervision of the training of insurance producers A person whose activities are limited to advertising without the intent to solicit insurance in Maryland if the advertisement is not limited to residents of Maryland and the person is not involved in insurance transactions for risks residing, located, or to be performed in Maryland A nonresident producer who conducts transactions for commercial property and casualty risks to an insured with risks located in more than one state and is licensed in the state where the insured maintains its principal office—the contract must insure risks located in that state; or A salaried, full-time employee who counsels or advises his employer about the employer's insurance interests provided that the employee does not sell or solicit insurance or receive a commission
Producers contract with insurer
A license does not create any actual, apparent, or inherent authority in the holder to represent or commit an insurer; the agent contract does create the producer's authority.
Appointment Procedures
An appointment is an agreement between an insurance producer and insurer under which the insurance producer, for compensation, may sell, solicit, or negotiate policies issued by the insurer. A Producer Register is a list of appointed insurance producers authorized to sell, solicit, or negotiate contracts of insurance on behalf of an insurer. The insurer is required to keep a producer register of its appointed agents. Within 30 days after appointing a producer, the insurer must add the following information to its producer register: The producer's name and license number The date the producer was appointed Any additional information that the Commissioner might require
Report of prosecution for crime
An insurance producer must report being prosecuted for a crime, other than a misdemeanor traffic violation, in any jurisdiction, to the Commissioner within 30 days after first appearing in court. This report must include: The charging document (citation, indictment, statement of charges, etc.) Any order issued by a court Any other relevant legal documents
Probation, Denial, Suspension, Revocation or Refusal to Renew (disciplinary Actions)
Following notice and opportunity for a hearing, the Commissioner may deny, suspend, revoke, or refuse to renew or reinstate an insurance producer license for any of the following reasons: Willfully violating regulations or orders of the Commissioner or any Maryland insurance law Intentionally misrepresenting or concealing a material fact in a licensing application Obtaining or attempting to obtain a license through misrepresentation, concealment or, fraud Misappropriating, converting, or unlawfully withholding money belonging to an insurer, insurance producer, beneficiary or an insured Willfully misrepresenting the provisions of an insurance policy Committing dishonest or fraudulent practices in the insurance business Being convicted of a felony or crime of moral turpitude Intentionally writing or issuing substantial over-insurance on property insurance risks Showing a lack of trustworthiness or lack of competence to act as an insurance producer Conducting the business of insurance in a manner other than good faith Failing an insurance examination Having been refused a license or certificate in another state, or having a license suspended or revoked in another state Failing or refusing, on demand, to pay any money that belongs to an insurer, producer, or other person who is entitled to it Willfully failing to comply with or violating an order, subpoena, or regulation of the Commissioner or the insurance regulatory authority of another state Soliciting or negotiating insurance contracts for an unauthorized insurer Forging another's name on any document related to an insurance transaction Improperly using notes or any reference material to complete a licensing examination Intentionally making a statement misrepresenting the terms or conditions of any policy issued by an authorized insurer to induce the owner to forfeit or surrender the policy or allow it to lapse for the purpose of replacing it with another Failing to pay income taxes or related interest or penalty under a final order or assessment of Maryland's tax laws or tax courts Knowingly employing an individual who has been convicted of a felony or crime of moral turpitude within the past 10 years to act in a fiduciary capacity Making an inaccurate statement with actual malice in providing information regarding the termination of an appointment with an insurer Transacting insurance business that was directed to the producer by another licensee whose license was suspended or revoked and the producer knew or should have known of the suspension or revocation
Assumed names/trade names
A person that is not an insurer may not assume or use a name that deceptively implies or suggests that it is an insurer. The holder of a license may not use any name other than the name in which the license is issued or a trade name filed with the Commissioner to engage in any activity for which a license is required, including the execution of any document related to marketing, negotiation, selling, or issuance of insurance.
Advisors (Types of licensing)
An adviser is a person who, for compensation, gives or offers to give advice or information about a policy's or contract's terms, conditions, benefits, coverage, or premium, or the advisability of changing, exchanging, converting, replacing, surrendering, continuing, rejecting, accepting, or procuring such a policy or contract. In Maryland, a person must obtain a license before acting as an insurance adviser. The Commissioner may issue an insurance adviser license to any competent and trustworthy person who is a resident of Maryland. The person must pass a written examination, or be exempt from such examination because he/she earned at least one of the following professional designations and/or membership in good standing of such professional organization: Chartered Property and Casualty Underwriter (CPCU) Certified Financial Planner (CFP) Society of Actuaries Casualty Actuarial Society Conference of Actuaries in Public Practice Certified Insurance Counselor (CIC) A variety of designations pertaining to life or health insurance An individual may also be exempt from examination if he/she is a nonresident licensed as an insurance adviser in his/her home state. A nonresident must take and pass the Maryland Adviser exam if the state of residence does not issue an Adviser License or the equivalent. A person applying for an insurance adviser license must pay appropriate application and license fees and must have a $1,000 surety bond for the state (to protect against the applicant engaging in dishonest or fraudulent practices while acting as an insurance adviser), and complete the licensing application. The adviser license does not authorize the licensee to adjust losses or receive compensation from an insurer or producer for the sale or placement of insurance. The adviser licensee may conduct an insurance advisory business as a sole proprietorship, partnership, association, or corporation if each individual who acts as an adviser in the firm is also licensed as an adviser and the trade name of the business is registered with the Commissioner. The license of an insurance adviser expires every other year on June 30th, unless renewed for an additional two-year term. An agreement between an insurance adviser and another person that relates to the providing of insurance advice or information is not enforceable by or for the adviser unless all of the following conditions are met: The agreement is in writing, in a form approved by the Commissioner The agreement is executed by the person to be charged (or by the person's legal representative) A copy of the agreement is delivered to the person when he/she signs it The agreement plainly states the required fee and the services the adviser is to perform
Requirement to report felony convictions
An insurance producer must report being the subject of any adverse administrative action in another jurisdiction or by another governmental unit in this state within 30 days after the matter's disposition. The report must include a copy of the order, consent order, and any other applicable legal documents.
Reinstatement
An insurance producer whose license lapses may apply for reinstatement for up to 1 year by filing a reinstatement application, paying the renewal and reinstatement fees (if any), and submitting proof of completion of continuing education requirements. An insurance producer whose license has expired may not conduct any insurance business until the effective date of reinstatement. An insurance producer applying within 60 days after his/her license expires will have his/her license effectively reinstated on the date the license expired. Applications for reinstatement more than 60 days, but within 1 year after expiration, are effective on the date of reinstatement. A licensee who does not apply for reinstatement within 1 year of expiration must apply for a license in the manner required for an initial license.
Renewal Notice
At least 1 month before a license expires, the Commissioner will mail to the licensee a renewal application form and a notice that states the required return date and renewal fee. A license is considered renewed if it's issued for the period immediately following a period for which the person previously possessed the same or a substantially similar license. A license expiration date is the last day of the month in which the licensee was born.
Individual Producer's Appointment versus Business Entity's Appointment
Before a business entity may accept in its own name compensation for acting as an insurance producer in the State, the business entity must obtain: A license in the kind of insurance for which the business entity intends to act as an insurance producer; and An appointment for the kind of insurance for which it intends to act as an insurance producer on behalf of an insurer
Duration and termination
Insurance producer licenses expire every other year on the last day of the producer's birth month, unless suspended, revoked, or terminated. Any insurer appointments a producer holds are terminated as of the date his/her license expires. Before the license expires, the producer may renew it for an additional 2-year term if the producer files a renewal application, pays any appropriate fees, and completes his/her continuing education requirements prior to the expiration date. If the producer files an application for renewal before the license expires, the old license remains in effect until the Commissioner issues a renewal license or until 5 days after the Commissioner refuses to renew the license and gives notice of the refusal to the holder.
Temporary license
The Commissioner may issue a temporary license, which is valid for 15 months, without regard to the education, experience or examination requirements in the following instances: To the surviving spouse, next of kin, personal representative, or appointed personal representative of a deceased insurance producer To the spouse, next of kin, employee, or legal guardian of a producer who is physically or mentally disabled To an employee of a firm or officer or employee of a corporation, on the death or disability of a producer A person may not act as a producer until he/she pays the required fee and secures a temporary license in the kinds of insurance that he/she desires to write and, if applicable, an insurer appointment. Within 30 days, the Commissioner must issue the license or state the reasons for refusing to do so. In order to handle the business temporarily, the temporary applicant must refer to the initial licensing instructions and follow the application procedures. notes
Business Entities
To get a nonresident producer license, a person must be currently licensed as a resident producer, and in good standing, in his/her home state. The Commissioner may verify this through the NAIC's producer database. "Home state," under Maryland law, means the state in which a person resides or has a primary place of business. The person's home state must award nonresident licenses to Maryland residents on the same basis that nonresident licenses are awarded to nonresidents of Maryland, also known as reciprocity. A resident producer applicant previously licensed for the same kind of insurance in his/her former state is exempt from education, experience, and exam requirements if the person is in good standing in his/her former state and the application is received within 90 days after the cancellation of the license in the former state. A producer moving to a different state must file a change of address with the Administration and provide certification from that state within 30 days. No fee or license application is required to file a change of address.
Nonresidents (types of licensing)
To get a nonresident producer license, a person must be currently licensed as a resident producer, and in good standing, in his/her home state. The Commissioner may verify this through the NAIC's producer database. "Home state," under Maryland law, means the state in which a person resides or has a primary place of business. The person's home state must award nonresident licenses to Maryland residents on the same basis that nonresident licenses are awarded to nonresidents of Maryland, also known as reciprocity. A resident producer applicant previously licensed for the same kind of insurance in his/her former state is exempt from education, experience, and exam requirements if the person is in good standing in his/her former state and the application is received within 90 days after the cancellation of the license in the former state. A producer moving to a different state must file a change of address with the Administration and provide certification from that state within 30 days. No fee or license application is required to file a change of address.
Termination of Appointment/Notice to producer
When there is any termination of the appointment, employment, contract, or other insurance business relationship with an insurance producer, the insurer must, within 30 days following the effective date of the termination, update the insurer's producer register by entering the effective date of the termination. The insurer must notify the Commissioner of the termination of appointment and within 15 days after providing notice to the Commissioner. The insurer must also mail a copy of the notice to the producer to the last known address and by certified mail. The notice must include any additional information, documents, records, or data pertaining to the termination or activities, including any activities that could result in the denial, suspension, revocation, refusal to renew, or reinstate the insurance license; and any findings by a court, government unit, or self-regulatory organization authorized by law. If the producer files comments with the Commissioner, a copy must be sent to the insurer, the Commissioner must make the comments part of the producer's file, and the comments must be included with every copy of the report about the producer that is distributed or disclosed for any reason by the Commissioner. If the termination is due to a failure to renew the insurance producer license, and the license is reinstated, the insurer may reappoint the producer retroactively effective the date the license expired.
Continuing education requirements
A licensed insurance producer is required to take 24 hours of continuing education per renewal period (including 3 hours related to ethics). A producer holding a Title license needs only 16 hours per renewal period. If a producer has held a license for 25 or more consecutive years, only 8 hours of continuing education per renewal period is required. An insurance producer may satisfy the continuing education requirements for the property and casualty license by submitting to the Commissioner the following: Proof that he/she has completed at least 24 hours of continuing education for the applicable renewal period Proof that he/she received continuing education credit relating to flood insurance if the producer sells flood insurance To increase the level of education of insurance producers, an insurance producer must obtain continuing education in the type of insurance for which the insurance producer is licensed. An insurer may not prohibit its insurance producers from obtaining continuing education credits from any course approved by the Commissioner. If continuing education is required, the Commissioner may grant a waiver for reasons that the Commissioner determines warrant the waiver. Others who are exempt from the requirements are: Attorneys at law of the state who are qualified as title insurance producers and who do not hold a license in any other kind of insurance Individuals who hold only a limited lines license to act as an insurance producer for limited line credit insurance Insurance producers who hold only a limited lines license in any type of insurance designated by the Commissioner A nonresident insurance producer has met the continuing education requirements of Maryland if he/she satisfies the continuing education requirements of his/her home state, and his/her home state allows insurance producers from Maryland to satisfy their continuing education requirements on the same basis.
Producer (Types of licenses)
A producer is a person who, for compensation sells, solicits, or negotiates insurance contracts. A producer is not an individual who performs clerical or similar office duties while employed by an insurance producer or insurer, or a regular salaried officer or employee of an insurer, if the officer or employee is not paid a commission or other compensation that depends directly on the amount of business obtained. A producer isn't a person who obtains and forwards information, without commission, for: Group insurance coverage Enrolling individuals under group insurance coverage Issuing certificates under group insurance coverage; or Assisting in administering group plans An insurance producer may qualify for a license in one or more of the following kinds of insurance: Life Accident, health, or sickness Property Casualty Variable life and annuity products Personal Lines of property and casualty Limited lines (motor vehicle, credit, travel, title, motor vehicle rental company, HMO, and portable electronics) Any other kind of insurance permitted by Maryland insurance laws
Initial licensing qualifications
Before a person acts as an insurance producer in Maryland, the person must obtain a license in the line of insurance for which the person intends to act as an insurance producer. In order for a person to obtain a license as an insurance producer, the person must: Be at least 18 years of age Be of good character and trustworthy Not have committed any act that the Commissioner finds would warrant denial of a license So that the applicant is reasonably familiar with the lines of business for which the applicant wants to be licensed, the applicant must successfully complete a program of studies established or approved by the Commissioner. The following may be excused from the required program of studies: A person who has, within the past 3 years, at least 1 years' experience as an employee of the State Administration or of an insurer or producer with responsible insurance duties related to the kinds of insurance covered by the license A person with a military service record who has, within the 3 years preceding the date of entering or immediately after discharge from the U.S. armed forces, at least 1 years' experience as an insurer's or producer's employee with responsible duties related to the kinds of insurance covered by the license
License Fee and Application
Before taking a written exam, an applicant must pay the application fee. The fee for the insurance producer license is $54 for the initial license and the renewal license. An applicant must submit a uniform application to the Commissioner and declare that the statements made are true, correct, and complete to the best of the applicant's knowledge and belief. The Commissioner may waive the examination and employment requirements for an applicant for a license for property or casualty insurance if the applicant has earned the: Chartered Property Casualty Underwriter (CPCU) designation by The American Institute for Chartered Property Casualty Underwriters; and is a member in good standing of the Society of Property Casualty Underwriters Fellow of the Casualty Actuarial Society Certified Insurance Counselor (CIC) by the Society of Certified Insurance Counselors Accredited Adviser in Insurance (AAI) Associate in Risk Management (ARM) An applicant for a limited lines license to act as an insurance producer for limited line credit insurance does not need to meet the examination requirements.
