Missouri State Insurance Law

Insurers and producers maintaining a website must include on the website:

- A contact address and telephone number for communication with producers or insurance companies - A notice that shows the states in which the insurers or producers are authorized to transact insurance

Time Table for the final examination report

- A final examination report must be filed no later than 60 days after an examination is completed. The examined insurer will have 30 days to file any submissions or rebuttals about any matter discussed in the report. Within 30 days after the rebuttal period, the Director must either accept the report or initiate any legal action deemed necessary.

Other than as permitted by law or expressly stated in an insurance contract, paying, giving, or allowing any of the following as an inducement for a person to purchase an insurance policy: (4)

- A rebate of insurance policy premiums - A special favor or advantage in the dividends or benefits of an insurance policy - A valuable consideration (anything of value) - Any stocks, bonds, or securities in any insurance company or other corporation, association, or partnership—including dividends accruing on same

How long do insurance agents have to produce documents to examiners?

- Any person being examined must make all documents and records available to examiners within 10 calendar days, unless the company or person demonstrates to the satisfaction of the Director that the requested record cannot be provided within 10 days of the request.

Resident individuals applying for an insurance producer license must: (4)

- Be at least 18 years old - Not have committed any act that is grounds for license denial, suspension, or revocation - Pay the required $100 license fee - Pass the examinations for the lines of authority applied for

Continuing education credit may be earned through courses of the following types: (4)

- Classroom instruction - Courses leading to a professional designation, if the licensee receives a passing exam grade after completing the course - Self-study courses for which the licensee passes a proctored exam after completing the course - Any course or program of instruction approved for use to meet professional continuing education in another Missouri profession, as required by law, that relates to the topic of insurance

Negotiation of an insurance contract includes, but is not limited to, the following activities: (6)

- Counseling any prospective purchaser to buy a particular policy or to insure with a particular company - Explaining coverage and giving recommendations as to coverage - Explaining the effect of age, health, or other risk-related conditions with respect to purchasing a particular policy - Recommending additions to or deletions from an insured's policy - Advising a prospective purchaser on the coverages or terms of a proposed contract - Advising a prospective purchaser on the premium cost of a proposed insurance contract, including the quoting of rates

Bulletin

A bulletin is an informal written communication to inform or educate the insurance industry and the general public about a regulatory topic or issue. A bulletin is informational in nature and is not an evaluation of specific facts and circumstances. Bulletins do not have the force or effect of law and must not be considered statements of general applicability that would be required to be made known publicly.

Nonresident exception to licensing

A nonresident who sells, solicits, or negotiates commercial property and casualty insurance to an insured with locations in more than one state if that nonresident is licensed as a producer in the state where the nonresident maintains a principal place of business and the commercial property and casualty insurance policy provides insurance in that state

Certificates of authority are renewed

Certificates of authority are renewed on an annual basis on July 1; however, they remain in effect until renewed or refused by the Director. Insurers that transact insurance business without a proper certificate of authority will be liable for any claims made against any policies they issued. Additionally, insurers transacting business without a certificate of authority must defend any lawsuits filed against them, but cannot file legal action pertaining to the transaction of insurance until after they have obtained a certificate of authority. All certificates of authority expire on the last day of June in each year and will be extended automatically pending formal renewal by the Director if the parties to whom they are issued have continued to comply with insurance code and other Missouri laws.

Producers may not act on behalf of an insurer if they are not listed in the insurer's register of appointed producers.

Each insurer must maintain a register of all producers it appoints to sell, solicit, or negotiate insurance on its behalf. New appointees must be added to the register within 30 days of appointment. Terminated appointments must also be removed from the register within 30 days and the reason(s) for termination must be provided to the Director. Insurers may not charge fees for adding or removing producers from their registries.

Disciplinary Action - Expungement of Records

If a disciplinary action against an insurance producer resulted in forfeiture or other monetary relief of $200 or less, and places no other legal duty upon the producer, it must be removed from the records after 5 years from the date of the order's execution or the Director's settlement agreement.

Producers Transferring to MO

If an applicant was previously licensed in another state for the same lines of authority for which a Missouri producer license is being sought, the examination requirement is waived. This waiver only applies if the applicant is licensed in the other state at the time of application or the application is received within 90 days of the cancellation of the license issued by the other state. If the other state's license was cancelled, the applicant must submit a certificate from that state indicating the applicant's license was in good standing while it was in effect. The Director may also verify the status of the applicant's previous license through the NAIC producer registry. If a producer who is licensed in another state moves to Missouri, they must apply for a resident producer license within 90 days of establishing legal residence in this state. Such person is exempt from examination requirements, as is any individual who applies for a limited lines producer license. The Director may suspend, revoke, deny, or nonrenew an insurance producer license if a person uses notes or any reference material improperly when completing an examination for an insurance license.

Interest Rates

If an insurance company is required to pay interest or they voluntarily pay interest on any claims, refunds, penalties, or payments for which the interest rate is not provided by law, the interest rate must not exceed 9% per year.

willful violation of a cease and desist order issued by the Director

In addition to any other penalty provided by law, willful violation of a cease and desist order issued by the Director is punishable by a fine up to $100,000, imprisonment for up to 10 years, or both. Violators must also be subject to suspension or revocation of an insurance license or certificate of authority.

the Director may issue a summary order

In some situations, the Director may issue a summary order, which is civil action that allows disposition of a matter without legal proceedings because the facts are not in dispute. If the persons affected by the summary order do not request a hearing, and the Director does not order a hearing within 30 days, the summary order becomes the final order. If a hearing is held, the Director will issue a final order, which can vacate or modify a previous order.

Nonresident producers obligations

Must notify the Director within 30 days of any change in legal residence Are not subject to continuing education requirements in Missouri if they satisfy the continuing education requirements of their home states

Certificate of Authority

No insurer is permitted to transact insurance in Missouri until it has been granted a certificate of authority from the Director. A certificate of authority certifies the insurer has complied with the insurance laws in this state with respect to conducting the business of insurance. This includes health services corporations, health maintenance organizations, and prepaid dental plans.

Change of Name or Address

Producers must notify the Director of a change in legal name or address within 30 days of the change. Failure to provide the required notice within 30 days may result in a fine up to $10 per month. Notice may be made in any manner acceptable to the Director. If a producer fails to notify the Director of a change in address, and such failure results in the inability for a complaint to be served to the producer, the Director may revoke the insurance producer's license immediately. Such revocation will continue until service is obtained.

waiver of the requirements

Producers who are unable to comply with license renewal requirements due to military service or extenuating circumstances (such as a long-term medical disability) may request a waiver of the requirements and any fines imposed for failure to comply.

Public Disclosure of Records

Records kept in the Director's office must be open to the inspection of the public and subject to rules established by the Director for their safekeeping. When requested, the Director must furnish certified copies of any paper, report, or documents on file in the Director's office to any person requesting them, upon payment of the fees allowed by law. The work of the Director, their employees and agents must not be considered public records except as provided by law.

False Testimony

The provisions do not prevent a person from applying to the circuit court to be excused from appearing, testifying, filing a statement, producing records, or obeying a subpoena. A person is not excused from these obligations on the grounds that the required testimony, statement, record, or other evidence, directly or indirectly, may tend to incriminate them or subject them to a fine, penalty, or forfeiture. If the person refuses to comply on the basis of their privilege against self-incrimination, the Director may apply to the circuit court to compel the information. The testimony, record, or other evidence compelled under the order may not be used as evidence against the person in a criminal case, except in a prosecution for perjury, contempt, or otherwise failing to comply with the order. Any person that knowingly engages in any act in violation of this section of insurance code is guilty of a Class E felony. If the offender holds a license or certificate of authority, the Department must revoke such license or certificate.

Registration of Fictitious Name/ Business Name

This registration tells the public who they are doing business with. Any name that does not readily identify the owner of the business must be registered as a fictitious name. Registration is not required for a sole proprietorship where the producer's name is the business name.

In exchange for negotiating, soliciting, or effecting insurance contracts, commissions may only be paid to

duly licensed producers

A duly licensed producer

holds a line of authority for the type of insurance sold.

Missouri-licensed producers conducting business on behalf of the business entity, domestic corporations, limited liability companies, or limited liability partnerships must

include a certificate of good standing, certificate of incorporation, or certificate of organization issued by the secretary of state and dated within the past year. Partnerships must include a copy of the fictitious name registration as issued by the secretary of state.

The Interstate Insurance Product Regulation Compact

is an initiative by member states to regulate certain insurance products by forming a Interstate Insurance Product Regulation Commission. Missouri is a member and the Director serves as its representative.

A producer who teaches any approved continuing education course

is eligible to receive the same number of credit hours awarded to students completing the course and passing any required exam.

If a producer license expires

it may be reinstated within 12 months of the date the renewal fee was due. No re-examination is required if: - All required renewal fees are paid - A penalty of $25 per month is paid for each month during which the license was expired - The producer submits proof of compliance with continuing education requirements

an insurance producer's active participation as an individual member or employee of a business entity producer member

may be approved for up to 4 hours of continuing education credit per each biennial reporting period. An insurance producer must not use this continuing education credit to satisfy continuing education hours required to be completed in a classroom or classroom-equivalent setting, or to satisfy any continuing education ethics requirements. The Department may audit the continuing education records of producers and course providers at any time.

Continuing Education - Excess hours accumulated during any 2-year period

may be carried over to the license renewal period immediately following the license period during which the course was held.

A Consumer Restitution Fund

must be created for the purpose of preserving and distributing to aggrieved consumers. It is the duty of the Director to distribute the funds to those injured by unlawful acts, practices, or omissions.

In order to obtain or renew an insurance license in Missouri, the following individuals must (5)

must submit the appropriate application and a $100 application fee: - Resident individual insurance producer - Nonresident individual insurance producer - Resident business entity insurance producers - Nonresident business entity insurance producer - Organizational credit business entity Application and/or renewal fees are not refundable if the application is refused by the Director or withdrawn by the applicant.

The Director may issue a temporary insurance producer license for a maximum of

of 90 days without requiring an examination if they determine that the temporary license is necessary for the servicing of an insurance business

In a final order,

the Director may impose a civil penalty or forfeiture. A civil penalty or forfeiture may not be imposed against a person unless the person has engaged in the act, practice, omission, or course of business constituting the violation. The Director may charge the person in violation of insurance laws for the actual cost of an investigation or proceeding. The funds must be paid to the Director to be credited to the Insurance Dedicated Fund.

If the Director determines that any insurer has engaged in an unfair method of competition or an unfair or deceptive act or practice—or is engaging in or has serious plans to engage in such competition or conduct

the Director may issue administrative orders as authorized under Missouri Insurance Code. This section of law also applies to any person who has materially aided or is aiding such conduct. Each violation of an unfair method of competition or deceptive act or practice will be considered a level 2 violation; multiple violations of the same type do not constitute separate violations. In addition, the Director may suspend or revoke the violator's insurance license or certificate of authority. The Director may also maintain a civil action for relief for such violations.

If the Department denies a license application

the applicant may request a hearing within 30 days of receiving the denial. If the Department has taken no action within 25 working days of receiving a producer license application, the application will be approved automatically. This approval does not apply if the applicant has been convicted of a felony or a crime involving moral turpitude. The director denies or nonrenews an application, they must notify the applicant in writing and include the specific reason for denial. The applicant may appeal the Director's decision as prescribed by law.

In addition to any other penalty provided by law, if a person willfully violates a cease and desist order issued by the Director

the court may declare the person in civil contempt of the order and impose a fine up to $100,000, imprisonment for up to 10 years, or both. Violators must also be subject to suspension or revocation of an insurance license or certificate of authority. The Director may bring suit to recover any fees or other sums which they are authorized by law to demand or collect. If a company or a person liable for those sums fails to pay, they will be liable for double the amount. Any violations of Missouri insurance law that are not classified, or do not call for a specific penalty or forfeiture, will be considered level 1 violations.

If a summary cease and desist order is issued because the Director determines that unauthorized or unlicensed persons have engaged in the business of insurance, or someone has committed insurance fraud

the summary order must include a statement of the reasons for the order and a statement whether the Department is seeking a civil penalty or costs of the investigation. If the person subject to an order requests a hearing, the Department must notify the person within 5 days of receiving the request that the hearing will be scheduled. The cease and desist order becomes effective on the date of issuance. Upon issuance of the order, the Director must serve each person subject to the order with a copy of the order and a notice that the order has been entered.

If the Director determines that a summary order is not appropriate,

they must issue a statement of reasons, together with an order to show why a cease and desist order and other relief should not be issued. This statement must be served either personally or by certified mail to the person subject to the proceedings. The Director must schedule a time and place at least 10 days later for a hearing after which the Director may issue a final order.

Unless the Director determines that a summary order is appropriate,

they must provide notice to any person subject to the proceedings stating the reasons for the action.

Renewal and deferred commissions may be paid

to an unlicensed person for the sale, solicitation, or negotiation of insurance if the person was licensed at the time of the insurance transaction

Under no circumstance may commissions, service fees, brokerage fees, or any valuable consideration be paid

to any person whose insurance license was suspended or revoked.

If a civil penalty or forfeiture remains unpaid

within 10 days after the order, the penalty or forfeiture may be recovered by a civil action by the Director. The Director may also suspend or revoke the license or certificate of authority of the person for willful violation.

Examination of Records

- Director may examine of any persons engaged in, or advertising to be engaged in, the insurance business at that person's expense. - Foreign or alien insurers, the Director may accept a financial examination report prepared by its parent insurance department or other appropriate agency in lieu of conducting a financial examination. However, such report may only be accepted if the person issuing the report is accredited by the NAIC. -All orders adopted must be considered a final administrative decision and must be served upon the company by certified mail. -Examination reports must only contain facts that appear in the books, records, documents, and testimony of the person being examined, including such person's agents. All working papers, recorded information, documents, and copies of all such materials obtained or disclosed during an examination must be treated as confidential and are not subject to subpoena. Such materials cannot be made public unless specifically permitted by law. Agreement to this confidentiality requirement must be made in writing between the parties before the confidentiality provision becomes effective.

Formed to accomplish the Compact's stated purposes, the Commission has the power to: (6)

- Enact rules with the force and effect of law that are binding in member states - Establish uniform standards for products covered under the Compact - Review/approve rate filings for disability income and long-term care insurance products, and other products of a potentially misleading nature - Designate products and advertisements that may follow a self-certification process without the need for the Commission's prior approval - Pursue legal proceedings or actions in the Commission's name, provided that such action does not affect any state insurance department's right to sue or be sued - Issue subpoenas for attendance or testimony of witnesses, or production of evidence The Commission meets at least once a year and is funded by filing fees from Compact states.

A producer appointment is the earliest date an insurer or its authorized agent is permitted to do any of the following: (5)

- Give a prospective producer any insurance applications that require the submission of a premium at the time of completion - Accept a premium from a prospective insurance producer - Accept for underwriting purposes an application submitted by a prospective insurance producer - Execute a written or verbal employment contract with a prospective insurance producer - Grant binding authority to the prospective insurance producer

If a person does not appear in or refuses to testify at a Department proceeding or fails to obey a subpoena as required by the Director, the Director may request the court to enforce compliance. The court may: (8)

- Hold the person in contempt - Order the person to appear before the Director - Order the person to testify about the matter in question or under investigation - Order the production of records - Grant injunctive relief - Impose a civil penalty up to $50,000 for each violation - Grant any other necessary or appropriate relief - Suspend, revoke, or refuse to issue any license or certificate of authority

Negative corrective action available to Director during examination of records

- If a person fails or refuses to obey a subpoena, the Director may petition a court and the court may enter an order compelling the witness to appear and testify or produce documentary evidence. Failure to obey the court order is punishable as contempt of court. - If a person refuses to comply with any reasonable request during an examination, such refusal will be considered grounds for the suspension, denial, or nonrenewal of an insurance license.

Solicitation of an insurance contract includes, but is not limited to, the following activities: (4)

- Initiating sales over the telephone other than scheduling appointments with producers to discuss insurance - Advising a prospective purchaser on the terms of existing coverage - Advising an insured to purchase additional insurance when receiving payment for existing business - Providing information about rates by referencing a published or printed list or computer database of standard rates

If, after receiving evidence a person has violated insurance laws or rules, the Director may: (4)

- Issue a cease and desist order - Issue a curative order or other order demanding compliance with insurance laws and rules - Award reasonable costs of the investigation - After a hearing held for a licensee violating any of the state's insurance laws, impose a civil penalty or forfeiture as prescribed by law, which must be paid within 10 days

If, based upon substantial and competent evidence, the Director determines that any person, including any business entity, has engaged in an unfair method of competition or an unfair or deceptive act or practice—or is engaging in or has serious plans to engage in such—the Director may: (4)

- Issue a cease and desist order - Issue a curative order, requiring the person to take specific action - Order a civil penalty or forfeiture - Award reasonable costs of the investigation

If the Director believes that a person has engaged in an act, practice, omission, or course of business constituting a violation of a rule, order, or insurance laws of Missouri, they may pursue legal action in a circuit court of Missouri to enforce compliance. In such case, the court may: (8)

- Issue a permanent or temporary injunction, restraining order, or declaratory judgment - Order other appropriate relief, which may include: - An asset freeze - Ordering the Director to take control of a defendant's property - Imposing a civil penalty or forfeiture - Imposing an order of restitution upon showing financial loss, injury, or harm to consumers - Ordering the payment of prejudgment and post judgment interest - Ordering reasonable costs of investigation and prosecution - Order other relief as the court considers necessary or appropriate

If an insurer commits any of these practices, it will be deemed an unfair trade practice if:

- It is committed in conscious disregard of Missouri's Unfair Trade Practice Act - It has been committed with such frequency it indicates a regular business practice to engage in that type of conduct

Any licensed person who is not a Missouri resident may be issued a nonresident producer license in Missouri for the same lines of authority that appear on the license in their home state under the following conditions: (3)

- The home state must award nonresident producer licenses to Missouri residents on the same basis - The person is in good standing in their home state and has submitted the appropriate application and licensing fees - The Director may verify the licensing status of an applicant requesting a nonresident producer license through the NAIC producer registry Individuals who have been issued surplus lines or limited line credit licenses in their home states may be issued nonresident licenses of the same type in Missouri.

The Director may suspend, revoke, or refuse to renew a producer license if a licensee has committed or is committing any of the following acts or practices that violate Missouri insurance laws or rules—including the provision of material assistance in committing such acts or practices: (15)

- Knowing violation of any state insurance law or Department regulation - Obtaining or attempting to obtain a license by fraud or misrepresentation - Forging a signature on an insurance application or insurance-related document - Conviction of a felony or crime involving moral turpitude (meaning an act that is contrary to community standards of moral integrity, such as fraud, arson, embezzlement, assault, murder, rape, and prostitution) - Demonstrating a lack of trustworthiness or competence - Misappropriating money belonging to an insured or insurer - Committing fraud in connection with an insurance transaction or aiding, abetting, or knowingly allowing another licensee to do so—leading to the suspension or revocation of that person's license - Acting as an insurance agency through persons not licensed as producers - Acting as a producer without a license - Having an insurance license revoked or suspended in another state - Committing unfair insurance or trade acts or practices, as defined by statute - Seeking the license primarily to conduct controlled business (such as procuring coverage for oneself or one's family, employer, employee, or an organization the licensee owns or controls) - Is a legal resident of another state that does not allow Missouri residents to obtain nonresident licenses - Operating as a business when the producer should have known such operation would likely result in the illegal placement of insurance with an unauthorized multiple employer self-insured health plan - Failing to comply with any administrative or court order directing payment of state or federal income tax

A producer may qualify for a license in one or more of the following lines of authority:

- Life insurance, including endowments, annuities, death or dismemberment coverage, and disability income - Accident and health or sickness insurance, which may include disability income benefits - Property insurance - Casualty insurance against legal liability for death, injury, disability, or property damage - Variable life and annuity products - Personal lines property and casualty insurance - Credit-limited line credit insurance (individuals applying for limited lines producer licenses are exempt from examination) - Any other line of insurance permitted under state law Each insurance office must be the principal office of at least one licensed producer. All laws applying to the insurance business also apply to the transaction of insurance business conducted over the internet.

The Director is authorized to use information contained in producer registries in any regulatory or legal action brought as part of their duties as Director. However, neither the Director nor any person will be permitted or required to testify in any private civil action concerning confidential documents, material, or information relating to a producer registry. The Director is permitted to share such information with: (3)

- Other state, federal, and international regulatory agencies - The National Association of Insurance Commissioners - Law enforcement authorities that agree to maintain confidentiality and privilege of documents, materials, and information

In order to obtain a surplus lines license in this state, a resident or nonresident property and casualty insurance producer must: (3)

- Pay an initial fee of $100 - Submit the required license application - Pass an exam

The following acts are not considered rebates: (3)

- Paying bonuses or abating premiums from accumulated surplus - Adjusting premiums for industrial policyholders who have continually made payments directly to the insurer, thus saving collection expenses - Adjusting group policy premiums based on loss or expense experience

A producer or insurer may offer free or discounted products or services in conjunction with a property and casualty insurance policy if the products or services are intended to: (6)

- Prevent or mitigate loss to persons or property - Provide loss control - Reduce rates or claims - Educate about risk of loss to persons or property - Monitor or assess risk, identify sources of risk, or develop strategies for eliminating or reducing risks - Provide post-loss services The Director may publicize rules to exempt, but not restrict, additional categories of free or discounted products or services.

The purposes of the Compact are to: (4)

- Promote and protect the interests of consumers of individual and group annuity, life insurance, disability income and long-term care insurance products - Develop uniform standards for these insurance products - Act as a central clearinghouse for review and approval of these products and, in certain cases, of insurer advertisements - Improve coordination between state insurance departments regarding the setting of uniform standards and review of these insurance products

A business entity acting as a producer must obtain a producer license and comply with the following: (5)

- Provide the name and address of a licensed agent who will be responsible for the business entity's compliance with the insurance laws, rules, and regulations of this state - Provide a list of all insurance producers to whom commission is paid and who are employed by or act on behalf of the business entity - Pay the $100 license fee - Disclose to the Director all officers, directors, and partners—even if they are not licensed - Notify the Director within 20 working days after the change of any information or the termination of any insurance producer

Sale of an Insurance Contract (3)

- Signing binders, certificates of insurance, commitments, endorsements, insurance identification cards, and insurance policies - Indicating that the requested coverage is or will be bound or issued - Issuing certificates of insurance, endorsements, binders, commitments, insurance policies, or insurance identification cards, except when done by a group policyholder

Certificate of Authority section of insurance code does not apply to: (11)

- Surplus lines insurance - Reinsurance - Transactions in Missouri involving a policy issued outside of Missouri for risks that are not located in or residents of Missouri - Attorneys acting in the ordinary course of business in the adjustment of claims or losses on behalf of a client - Transactions involving group or blanket policies (life, accident, health, annuity) where the master policy is issued by an authorized non-domestic company - Wet or ocean marine insurance - Life or health insurance issued to nonprofit charitable or religious organizations - Car rental and travel insurance - Transactions involving one or more industrial insureds, meaning an insured: - Which purchases insurance of any risk other than life, health, and annuity contracts by use of a full-time employee acting as an insurance manager - Whose aggregate annual premium total $100,000, excluding Workers' Compensation - Has at least 25 employees

Insurers may appoint individual producers or business entity producers. If a business entity producer is appointed, all individual producers employed by the business entity are also considered to be appointed by the insurer. Authority under the appointment is only granted for the lines of authority for which each producer is licensed. An appointment for an individual producer terminates automatically upon the following events: (3)

- The individual's termination or resignation from the licensed business entity for which they work - The termination of the licensed business entity by the insurer - Nonrenewal, surrender, suspension, revocation, or surrender of the individual's producer license If an insurer terminates an appointment because a producer violated the law, it must provide to the Director a report or summary of the acts that prompted the insurer to believe a violation of law took place.

Insurance producer licenses must contain the following information: (4)

- The licensee's name, address, and identification number - The issue and expiration dates of the license - The lines of authority for which the license was issued - Any other information required by the Director

When determining any penalty or relief sought from a violator, the Director must consider, among other factors, whether: (4)

- The violation is likely to continue or reoccur - The amount of any actual financial loss and restitution was made - The violation was detected as part of a self-audit or internal compliance program and immediately reported to the Director - The violation had previously been detected but inadequate policies and procedures did not prevent reoccurrence

The Director may issue a temporary insurance producer license for a maximum of 90 days without requiring an examination if they determine that the temporary license is necessary for the servicing of an insurance business in the following circumstances: (4)

- To the surviving spouse or court-appointed personal representative of a licensed insurance producer who dies or becomes mentally or physically disabled to allow adequate time for the sale of the insurance business owned by the producer or to provide for the training and licensing of new personnel to operate the business of the producer - To a member or employee of a business entity licensed as an insurance producer, upon the death or disability of an individual designated in the business entity application or the license - To the designee of a licensed insurance producer entering active service in the Armed Forces of the United States - In any other circumstance in which the Director determines that the public interest will best be served by the issuance of the license

The following fiduciary duties and responsibilities apply to the transaction of personal insurance in Missouri: (6)

- Unless a longer time is permitted under a written agreement between the producer and an applicant or policyholder, producers must handle all applications for new insurance and requests for policy changes in a manner that results in insurance being issued as soon as reasonably possible - If no insurer willing to provide coverage has been found within 30 days of the date of an original insurance application, the producer must inform the applicant of this fact, in writing, immediately - When an insurer requires additional information prior to issuing, renewing, or amending a policy, the producer must inform the insured or applicant of the need for additional information at the earliest reasonable opportunity - Producers must provide all insureds with written evidence of coverage at the time coverage is bound or a policy is issued, whichever occurs earlier, and no later than 30 days after the effective date of coverage - It is a dishonest and unethical practice for a producer to use a senior-specific certification or professional designation that implies or misleads a consumer to believe the producer has special certification or training with respect to advising or servicing seniors, individuals 60 years or older, in connection with the solicitation, sale, or negotiation of an insurance product - It is prohibited for a producer, or a member of the producer's family, to be a beneficiary or have any ownership interest in any policy held by any client unless an insurable interest exists between the two

No person is permitted to sell, solicit, or negotiate any type of insurance in Missouri unless licensed for that line of authority. Exceptions exist for the following persons, who are not required to obtain a producer license:

- no commissions for insurance written or sold in MO for: - clerical/ administrative employees, - person's duties are underwriting, loss control or claims inspection, processing, adjusting, investigation, or settlement - person acts in supervisory capacity and is not apart of the sale. - person furnishing information for group insurance without commissions received - a person engaged in administration of an employee benefit program without compensation by the issuing insurance contract - employees of insurers/ organization that engage in inspection, rating, classifying ricks or engage in producer training with no sales or prospective clients - A person that advertises activities in MO but does not intend to solicit/ sell insurance in MO - A salaried, full time employee who gives insurance advice to their employer without commissions or selling or soliciting insurance. - A licensed attorney who provides probate or other bonds required by the court on behalf of clients

How often must Directors conduct a financial examination of records?

-Director must conduct a financial examination of every licensed Missouri insurer at least once every 5 years. At insurer's expense the director may hire the following persons as examiners: attorneys, appraisers, independent actuaries, certified public accountants (CPAs), and other professionals and specialists.

Course providers must furnish to the Director, in prescribed format, certification of each producer who completes an approved continuing education course within

30 business days of completing such course.

Continuing Education - insurance producers must complete

16 hours of approved continuing education during each 2-year license renewal period. Courses must address Missouri laws, producer duties and responsibilities, business ethics, sales suitability, and the types of insurance sold under the lines of authority for which the producer is licensed. At least 3 hours of the 16 hours of instruction must be devoted to the topics of ethics, Missouri law, and producer duties and responsibilities.

Insurers and producers must retain copies of their compensation agreements for

3 years and make them available for the Director's inspection.

Reporting of Actions

A producer must report any administrative action taken against them in any jurisdiction or by any governmental agency, including a copy of the order, consent order, or other related legal documents. Written notice must be made within 30 days of the final disposition of the matter. A producer must also report any criminal prosecution for a felony, or a crime involving moral turpitude, in any jurisdiction, including a copy of the indictment and any other related legal document. Written notice must be made within 30 days of the initial pretrial hearing date.

A surplus lines licensee

A surplus lines licensee is licensed to place insurance with nonadmitted insurers authorized to transact insurance in the state in which the producer or broker is licensed. In Missouri, producers are not permitted to procure any surplus lines insurance with a nonadmitted insurer if they are not licensed as a surplus lines licensee. Surplus lines licenses renew biennially on the producer's birth date and remain in effect until refused, revoked, or suspended by the Director. Failure to pay the biennial license renewal fee of $100 when due results in termination of the license.

Insurance Dedicated Fund

All fees due to the state of Missouri under the provisions of Missouri insurance laws must be paid to the Director and deposited in the state treasury in a special fund known as the Insurance Dedicated Fund. The funds are subject to appropriation of the general assembly and must be devoted solely to the payment of expenditures incurred by the Department.

Retention of Insurance policy records

All insurance policy records must be maintained during the term of the policy and for at least 2 years after the policy terminates. All claim files must be maintained during the calendar year in which they are closed and for at least 3 years afterward.

Fiduciary Responsibilities

An insurance producer, whether acting on behalf of an insurance company, insured, or applicant, must be held responsible in a trust or fiduciary capacity for any money collected on behalf of these persons. The funds collected, if not immediately remitted, must be held in a trust account. The producer must keep records of the transactions of this account and have the books accessible for inspection. An insurer or insurance producer may charge additional fees for premium installments, late payments, policy reinstatements, or similar services. These fees must be disclosed to the applicant or insured in writing.

Any person that transacts insurance business without a certificate of authority

Any person that transacts insurance business without a certificate of authority is guilty of a Class D felony. That person, and any person aiding or abetting such conduct, may be subject to the following actions of the Director: - Administrative orders, as authorized under insurance code - A civil action for relief, as authorized under insurance code - The referral of evidence of the violation to a proper prosecuting attorney or the attorney general

Penalties may be increased or decreased by the Director or the court in accordance with the following:

Increased by 1 classification step, if the violation:Was committed knowinglyResulted in actual financial loss to consumers Increased by 2 classification steps, if the violation was committed knowingly in disregard of law Reduced by 2 classification steps if, prior to receiving notice from the Department, the violation was detected by the violator in a self-audit or internal compliance program and reported immediately to the Director

During the course of any Department investigation, examination, inquiry, or other proceeding, it is illegal for any person to: (2)

Knowingly make a false statement to the Director in connection with any proceeding Provide false information in any insurance company books or papers used in the course of any examination, inquiry, or Department investigation

Penalties and forfeitures ordered by the Director

Level 1 violations - No penalty or forfeiture Same as court Level 2 violations - $1,000 per violation up to an aggregate of $50,000 per year for multiple violations same as court Level 3 violations - $5,000 per violation up to an aggregate of $100,000 per year for multiple violations similar to court Level 4 violations - $10,000 per violation up to an aggregate of $250,000 per year for multiple violations Level 5 violations - $50,000 per violation up to an aggregate of $250,000 per year for multiple violations

Penalties and forfeitures ordered by the court

Level 1 violations - No penalty or forfeiture same as Director Level 2 violations - $1,000 per violation up to an aggregate of $50,000 per year for multiple violations same as Director Level 3 violations - $5,000 per violation up to an aggregate of $200,000 per year for multiple violations similar to Director Level 4 violations - $20,000 per violation up to an aggregate of $1 million per year for multiple violations Level 5 violations - $1 million per violation with no limit for multiple violations

Misrepresentations and False Advertising of Insurance Policies (8)

Making a statement in any estimate, illustration, sales presentation, or comparison that: - Misrepresents a policy's benefits, advantages, conditions, or terms - Misrepresents a policy's dividends or share of surplus to be received - Is false or misleading pertaining to dividends or shares of surplus already paid under a policy - Misleads or misrepresents the financial condition of any insurer - Uses the name or title of any policy, or class of policies, that is a misrepresentation - Is a misrepresentation intended to induce the purchase, lapse, surrender, exchange, or conversion of an insurance policy; this includes an intentional misquoting of a policy's premium - Is a misrepresentation intended to effect a pledge, assignment, or loan against a policy - Misrepresents a policy as being a share or shares of stock

Misrepresentation in Insurance Applications

Making false or fraudulent statements on an insurance application or pertaining to an insurance application for the purpose of securing a fee, commission, money, or other benefit from any insurance company, agency, agent, broker, or other person.

Uniformity of Regulation - Director's Qualifications

The Director may consult with other members of the National Association of Insurance Commissioners and other authorized entities to attain greater uniformity in insurance and financial services regulation among state and federal governments and self-regulatory organizations. The Director may share records with any entity, except that any record that is confidential must not be disclosed unless the entity agrees in writing, prior to receiving the record, to provide it the same protection. A waiver of any applicable privilege or claim of confidentiality regarding any record must not occur as the result of any disclosure.

Divisions established by Missouri's Director - 3

The Director may establish 3 or more divisions within the Department to administer and enforce the insurance laws of Missouri, including - the Division of Consumer Affairs, - the Division of Insurance Company Regulation, and - the Division of Insurance Market Regulation.

Orders of the Director may be subject to judicial review.

The Director may modify or set aside all or part of any order issued by them until the expiration of the time allowed for filing a petition for judicial review. If a petition for judicial review is filed, the Director may modify or set aside all or part of the order until the transcript of a record of petition has been properly filed.

Director's Authority

The Director may not make a rule or regulation that conflicts with any Missouri law and has the power and authority to: - Regulate the internal affairs of the Department, financial institutions, and professional registration - Prescribe forms and procedures to be followed in Department proceedings, financial institutions, and professional registration, including continuing education guidelines - Assist with the interpretation and enforcement of state laws relating to insurance - Issue producer licenses, certificates of authority, and cease and desist orders - Conduct hearings - Supervise the state's two guaranty funds - Amend or withdraw any insurance rule or regulationAny change will only be effective after proper notice has been given, a hearing has been held, and the documented change has been filed with the secretary of stateHearings must be held at least 15 days before any proposed rule or regulation is adopted - Upon request and payment, furnish a copy of any rule, regulation, or order to any person making the request - Publicize rules regarding the submission of rate and form filings, rules, license applications, including materials requested in the course of a financial or market conduct examination - The Director of Insurance does not create law. The Director has the authority to make any rules necessary to enforce the insurance laws passed by the state legislature.

Investigation of Companies by the Missouri Director

The Director must examine and inquire into all violations of the insurance laws of Missouri and investigate the business of insurance transacted in Missouri by any insurance agent, broker, agency, or insurance company. The Director or any of their duly appointed agents may compel the attendance before them, and may examine, under oath, the directors, officers, agents, employees, solicitors, attorneys, or any other person in reference to the condition, affairs, or management of the business. They may administer oaths or affirmations and require the production of records, books, papers, contracts, or other documents if necessary. The Director may make and conduct the investigation in person, or they may appoint one or more persons to make and conduct it for them. The Director will assess the expenses of any examination against the company examined.

notice of intent to initiate administrative action

The Director must provide notice of intent to initiate administrative action, and serve that notice personally or by certified mail, to any person subject to Department proceedings. The notice must direct the person named in the notice to show good cause why a cease and desist order or other relief should not be issued. A hearing must be held no fewer than 10 days after the notice is served.

Hearings and Final Orders

The Director must provide notice of intent to initiate administrative action, and serve that notice personally or by certified mail, to any person subject to Department proceedings. The notice must direct the person named in the notice to show good cause why a cease and desist order or other relief should not be issued. Any person aggrieved by an order of the Director must be entitled to a hearing before the Director. A hearing must be held no fewer than 10 days after the notice is served. A final order issued by the Director is subject to judicial review. However, any findings of fact or conclusions of law regarding the actual costs of the investigation or proceedings must be subject to review. If a hearing is requested or ordered, the Director may modify, vacate, or extend the order until final determination. The Director may issue subpoenas, compel attendance of witnesses, administer oaths, hear testimony of witnesses, receive evidence, and require the production of books, papers, records, correspondence, and all other written and authorized documents relevant to the proceeding in contested cases. Upon conclusion of a hearing, the Director will issue a final order, which can vacate or modify a previous order.

Filing of Records and Signatures

The electronic filing of records and signatures is authorized when carried out in accordance with the federal Electronic Signatures in Global and National Commerce Act.

General Powers and Duties Director's Qualifications

The head of the Missouri Department of Insurance is the Director of Insurance. The Director must be a Missouri resident and is appointed by the governor with the senate's approval. The Director holds the office concurrently with the governor until a successor is appointed. It is unlawful for the Director or a deputy director to hold an office of position with an insurance company or to have any interest in an insurer other than as a policyholder. Insurance Department employees may not hold any type of insurance license.

written agreement with a producer regarding commissions and compensation

Unless an applicant or an insured enters into a written agreement with a producer that clearly defines the amount and extent of compensation, producers are prohibited from receiving from policyholders any compensation other than commissions deducted from insurance premiums. In addition, in the absence of such a written agreement, producers are prohibited from charging an insured a greater sum than the premium charged by the insurer for a particular policy. This prohibition includes payment for the adjustment of claims. Insurers are prohibited from paying any commission for producer services to any person or business entity not licensed as an insurance producer. Surplus lines producers may compensate duly licensed producers for referrals and the placement of surplus lines insurance.

The Director may require the temporary licensee to have

a suitable sponsor who is a licensed producer or insurer who assumes responsibility for all acts of the temporary licensee and who may impose other similar requirements designed to protect insureds and the public. The Director may revoke a temporary license if the interests of insureds or the public are endangered. A temporary license may not continue after the owner or the personal representative disposes of the business.

An individual applying for a resident insurance producer license must

apply for the license and pass a written exam for the lines of authority for which the person has applied. An individual who fails to appear for an exam as scheduled, or who fails to pass the exam, must reapply for an exam and remit all required fees and forms before being rescheduled for another exam.

A producer license renews

biennially (every 2 years) on the producer's birth date and the renewal fee is $100. Producer licenses continue in effect until they are refused, revoked, or suspended by the Director