Examination for Missouri Insurance Producer's License

examination

-director requires that the applicant take and pass a written exam -director may designate an independent testing service to prepare and administer the exam -individual applying for an insurance producer license who was previously licensed for the same lines of authority in another state won't be required to complete exam -if applicant is found to have used notes or any other reference materials to complete exam for insurance license, the director may suspend, revoke or refuse to issue or renew the applicants producer license

producer regulation

-any person who is appointed or who acts as producer for an insurance company in MO and who received or collects money from any source is a producer will be held responsible in a fiduciary capacity for those funds

retrospective commissions

-are prohibited from using any payment plans to insurance producers which would allow the company to receive an agreed portion of its earned premium free from any normal claims or allow insurance producers to pay all normal claims or allow insurance producers to pay all normal claims from the remainder and retain the money not paid to claimants as compensation

cease and desist orders

-if the director suspects agent has committed violation or is engaged in unfair trade practice, director may hold hearing for any purpose necessary -any person who willfully violates provisions may be punished by a fine up to $100,000 imprisonment or up to 10 years and persons license of authority may be subject to suspension of revocation

expiration

-if they allow license to expire, producer may reinstate the same license without passing written exam within 12 months from due date of renewal fee -must provide proof of CE requirements have been met and pay penalty of $25 per month that the license was expired in addition to the requisite renewal fees that would have been paid if license had been renewed in timely manner -director isn't required to issue a new license to producer whose license has been suspended or revoked

boycott, coercion and intimidation

-illegal to be involved in any activity of boycott, coercion or intimidation that is intended to restrict fair trade or to create a monopoly

discrimination

-in rates, premiums or policy benefits for people within the same class or with the same life expectancy is illegal -no discrimination may be made on the basis of an individual's marital status, race, national origin, gender identity, sexual orientation, creed or ancestry unless the distinction is made for a business purpose or required by law -prohibited to deny insurance benefits or coverage on the sole basis of sex or marital status -if director thinks insurer has done this: --issue administrative orders --seek civil action for relief --suspend or revoke the license or certificate -each act doesn't constitute separate violation but level 2 violation --level 2 violation which may result in $1000 fine with max penalty of $50,000

profit sharing

-is permitted: the amount of commission paid to an insurance producer may vary

misrepresentation

-its illegal to issue, publish or circulate any illustration or sale material that is false, misleading or captive as to policy benefits or terms

nonresidents

-person who isn't a legal resident of missouri may be licensed to act in this state as a nonresident insurance producer without taking test if: --person is currently licensed as resident in good standing of home state --person has submitted proper request of licensure and has paid fees prescribed by director --person has submitted to director the application for licensure that the person submitted to his or her home state --the state where person resides accords the same privilege to residents of missouri

renewal

-producers license must be renewed biennially on the anniversary date of issuance and continue in effect until refused, revoked or suspended -licensed insurance producer who is unable to comply with license renewal procedures due to disability or military service may request waiver of those

rebating

-any inducement offered to the insured in the sale of insurance products that is not specified in the policy -both the offer and acceptance of a rebate are illegal --rebates of premiums payable on the policy --special favors or services --advantages in the dividends or other benefits --stocks, bonds securities and their dividends or profits

qualifications

-be at least 18 years old -file an application with director -pay the $100 license fee, submitted with application -pass exam which is required for the license being sought -haven't committed any act that is grounds for license denial suspension or revocation

regulation of insurers

-before insurers may transact business in a specific state, they must apply for and be granted a license or certificate of authority from the state department of insurance and meet any financial capital and surplus requirements set by the state -insurers who meet the states financial requirements are considered authorized or admitted into the state as a legal insurer -those insurers who haven't been approved to do business in the state are considered unauthorized or non admitted -no insurance company including health maintenance organizations may transact business in missouri without a certificate of authority -certificate of authority must be renewed annually as of july 1 -any person who transacts insurance without a certificate of authority will not impair the validity of any insurance contract

director of insurance

-chief officer to the department of insurance, financial institutions, and professional registration -appointed by governor with consent of senate and holds office with governor and until successor is appointed

change of address

-every producer licensed must notify director in writing within 30 days of any change of address -director may immediately revoke the license of the insurance producer until service may be obtained

penalties

-guilty person will be ordered to pay a fine of up to $1000 for each violation not to exceed $100,000 in any 12-month period and have their license revoked or suspended

interstate insurance product regulation compact

-interstate insurance product regulation compact is formed to help states jointly regulate designated insurance products -purpose: --promote and protect consumers of individual and group annuities, life and LTC insurance and disability income products --develop uniform standards for insurance products --establish a central clearinghouse to receive and provide review of insurance products --approve product filings and advertisements --improve coordination of regulatory resources and expertise between states --perform any other related functions that are consistent with the state regulation of the business insurance -missouri is member of interstate insurance product regulations commission and DOI is commissions designated reps

marketing practices

-its unfair trade practice to knowingly commit an unfair method of competition or to engage in such actions with enough frequency that the commission of unfair marketing practices indicates a general business practice -if DOI determines insurer has committed an unfair trade or competition practice, the department may issue an order requiring the person to cease and desist from engaging in competition, act or practice and impose penalties for violation of insurance laws

obtaining a license

-its unlawful to act as producer or agency without a license

business entity producers

-may obtain insurance producer license using the uniform business entity application -must pay a license fee of $100 and must designate a licensed individual insurance producer to be responsible for entity's compliance with the insurance laws, rules and regulations

business entity

-may reinstate its producer license within 12 months of due date of renewal by paying required license renewal fee plus penalty of $25 per month that the license was expired

guaranty association disclaimer

-missouri law requires that life and health insurance policies contain a clear and conspicuous disclaimer on the policy face page: --state the name and address of the life and health insurance guaranty association and insurance department --prominently warn the policy or contract holder that the missouri life and health insurance guaranty association may not cover policy or if its available, it will be subject to substantial limitations, exclusions and conditioned on continued residence in state --state insurer and agents are prohibited by law from using existence of guaranty association for purpose of sales --emphasize that policy or contract holder shouldn't rely on coverage under missouri life and health insurance guaranty association when selecting an insurer --provide other info as directed by director

commissions and compensation

-no insurer transacting business in MO may pay any commission or other compensation -except to a licensed producer of the company or to a licensed insurance agency having a copy of the license on file with the insurance company -when surplus lines producer accepts surplus lines insurance from a duly licensed agent, the surplus lines producer may compensate the agent for that transaction

exemption from licensing

-not directly or indirectly involved with actual sale of insurance contract and don't receive commission -following people aren't required to hold insurance producer license: --director or employee of insurer whose activities are limited to executive, administrative, managerial or clerical --director or employee of special agent assisting insurance producers by providing technical advice and assistance to licensed insurance producers --employee engaged in administration or operation of program of employee benefits for the employers or associations own employees --employees of insurers or organizations engaging in the inspection, rating, or classification of risks, or in the supervision of the training of insurance producers and who aren't individually engaged in the sale of insurance --person whose activities are limited to advertising without the intent to solicit insurance --a nonresident who sells, solicits or negotiates a contract of insurance for commercial property and casualty risks to an insured with risks located in more than one state insured under that contract --salaried full-time employee who counsels or advises his or her employer relative to the insurance interests of the employer

defamation of insurer

-occurs when oral or written statement is made thats intended to injure a person engaged in the insurance business -applies to statements that are maliciously critical of the finance condition of any person or company

records

-of all these agreements must be maintained by both the company and the producer for 3 years

people required to be licensed

-person can't sell, solicit, or negotiate insurance unless they are licensed with appropriate line of authority -purpose is to ensure that a producer meets educational and ethical standards required to fulfill producers responsibilities to insurer and to public

false advertising

-advertisements can't include any untrue deceptive or misleading statements that apply to the business of insurance or anyone who conducts it -includes: --terms, benefits, conditions or advantages of insurance policy --any dividends to be received from the policy or previously paid out --financial condition of any person or the insurance company --true purpose of an assignment or loan against policy -representing policy as a share of stock or using makes or titles that may misrepresent true nature of it will be false advertisement

continuing education

-all insurance producers must successfully complete 16 hours of continuing education every 2 years, prior to license renewal -three hours must be completed in courses related to ethics, state law and producer duties -excess hours accumulated during 2 year period may be carried forward onto to the next 2 year period -director may grant extension of time for CE not to exceed one year -waiver may be granted for: --serious physical injury or illness --active duty in armed services for extended period of time --residence outside US --license is at least 70 years of age

premiums handling standards

-producers must ensure that each applicant for new policy receives coverage as soon as reasonably possible -if insurer doesn't provide coverage within 30 days of app, producer must inform the prospective insured of fact in writing -all premiums associated with personal insurance policies must be remitted within 30 days of receipt -aditional incidental fees for premium installments, late payments, policy reinstatements or other similar services specifically provided for by law

record keeping

-producers must maintain complete records for each individual insurance policy unless its the responsibility of insurer -records must be maintained for 3 years and available for inspection by the director -producers must be able to retrieve those records from storage within 5 business days

power of director of insurance

-regulate the internal affairs of department of insurance -prescribe forms and procedures to be followed in proceedings before the department -aid in interpretation of any state insurance law -withdraw or amy any rule or regulation

reporting of actions

-this report must include copy of order, consent order or other relevant legal documents

exam of records

-to ensure that the companies remain solvent and conduct business of info in compliance with state laws and regulations pertaining to licensing, policy forms, rates, claims and market conduct -director must conduct a financial exam at least every 5 years but may conduct exams as often as they want -exam fees are responsibility of company being examined

illegal inducement

-unlawful to pay, offer or accept any of the following as an inducement to buy insurance --any special favor or advantage in dividends or benefits --any stocks, bonds, securities or accrued dividends or profits --anything of value not specified in the insurance contract

missouri insurance guaranty association

-was created to protect policy holders, insureds and beneficiaries when insurers fail to perform contractual obligations due to financial impairment -all insurers are required to be members of the association as a condition of their authority to transact insurance in this state -association may not expend more than $300,000 total on the life of any individual -life and health guaranty association is required to maintain 3 accounts: --life insurance account --annuity account --health insurance account -insurance companies can't advertise the existence of the guaranty association nor can they or their agents bring up the guaranty associate in a sales presentation