Oklahoma Life & Health Laws
Unfair Practices and Frauds - Defamation
It is illegal to make any false oral or written statement that is intended to injure someone in the insurance business.
Unfair Practices and Frauds - False Information and Advertising
It is illegal to make, publish, circulate, or place before the public in any other way an advertisement, announcement, or statement containing any assertion, representation, or statement with respect to the business of insurance or with respect to any person in the conduct of his or her insurance business which is untrue, deceptive, or misleading.
Unfair Practices and Frauds - Rebating and Inducement
It is illegal to offer as an inducement to purchase insurance any of the following: Employment Special profits Tangible prizes/property worth more than $100 An insurance contract on credit Company stock Securities Rebates However, a producer may legally share commissions with another licensed producer.
Unfair Practices and Frauds - Coercion of Borrowers
It is the borrower's right to seek insurance from anywhere, so lending institutions cannot make insurance mandatory from a specific insurer and/or producer
Certificate of Authority
It is unlawful for any insurer to transact insurance business in Oklahoma without being issued by the Commissioner. A certificate is not required if the activity is investigation and adjustment of claim(s); collecting premiums or servicing in force policies by an insurer formerly licensed in Oklahoma. Certificates must be renewed annually before March 1.
Unfair Practices and Frauds
The primary purpose of the unfair competition law is to regulate insurance trade practices.
Insurance Transaction
The solicitation and inducement to buy insurance, to include preliminary insurance negotiations, selling insurance, collecting premiums, and delivering policies. It also includes any subsequent actions required by the effectuation of an insurance contract.
Unfair Practices and Frauds - Boycott, Coercion, or Intimidation
This act consists of entering into action resulting in an unreasonable restraint of, or monopoly in the insurance business (making the purchase of insurance from a particular source the condition to another business transaction).
Lines of Authority
An insurance producer may receive qualification for a license in one or more of the following lines of authority: Life Accident and health or sickness Property Casualty Variable life and variable annuity products Personal lines Commercial lines Credit Title insurance Aircraft title insurance Any other line of insurance permitted under state laws or regulations An insurance producer license will remain in effect unless revoked or suspended as long as the license fee is paid and education requirements for resident individual producers are met by the due date.
Penalties
Any person convicted of violating (or aiding/conspiring in violating) insurance laws will be guilty of a felony and will be fined up to $5,000 or be imprisoned for 1-5 years, or be both fined and imprisoned. Except for those persons exempt from licensure, it's unlawful for any person to do or perform any of the acts of an insurance producer, limited lines producer, managing general agent, surplus lines insurance broker, insurance consultant, or customer service representative without being licensed. Any person convicted of violating the provisions of this section is guilty of a misdemeanor and will be fined up to $500 or imprisonment in the county jail for 6-12 months, or be punished by both.
Credit Life, Accident and Health Termination
If the debtor is covered by a group credit insurance policy providing for the payment of single premium to the insurer, in the event of termination for any reason, insurance coverage with respect to any debtor then insured under such policy will continue for the entire period for which the single premium has been paid, subject to the provisions of the policy relative to early termination of a debtor's insurance.
Unfair Practices and Frauds - Premature Disposal of Premium Notes
No insurer or agent thereof shall hypothecate, sell, or dispose of a promissory note received in payment of any part of a premium on a policy of insurance applied for prior to the delivery of the policy.
Anti-fraud Unit
Violations of any laws pertaining to insurance fraud or any insurance product or insurance organization that has been used as an instrument of criminal activity may be investigated by the Anti-Fraud Unit. If the Unit determines that a violation of any criminal law of this state may have occurred, it may refer the matter to the Oklahoma State Bureau of Investigation for further investigation. The Insurance Department will retain the authority to initiate and prosecute any civil action it deems necessary or advisable.
CE exemptions
The following agents/producers are exempt from CE requirements: Limited lines licensees Producers and limited representatives who are age 65 or older, have at least 30 years experience, and who no longer write new business.
License Required
A person cannot sell, solicit, or negotiate insurance in this state for any class of insurance unless the person is licensed for that line of authority. A penalty for selling, soliciting, negotiating, or procuring surplus lines insurance in this state without a surplus lines broker license will be waived if the Commissioner receives an application for licensure as a surplus lines broker within 30 days from the effective date of the policy at issue. No person can act as an insurer and no insurer can transact insurance in Oklahoma except as authorized by the Commissioner.
Violations
A person who violates this law will be subject to a civil penalty of up to $10,000 for each act of violation and for each day of violation. If the Commissioner believes a person has violated this law, the Commissioner may: Revoke any license or registration issued or approved by the Insurance Commissioner Issue a cease and desist order Institute a civil suit for injunctive relief to restrain the person from continuing the violation and to recover a civil penalty
Insurance Information and Privacy Protection requirements
A privacy notice must state: The categories of nonpublic, personal financial information the licensee collects The categories the licensee discloses, to whom, and that some disclosures are provided to affiliated and nonaffiliated 3rd parties as permitted by law That the consumer has the right to opt out of the disclosure. This is sometimes referred to as the opt-out notice The institution's safeguards For a consumer who is not a customer, a licensee may provide a short-form initial privacy notice instead of the long-form notice when he/she delivers the opt-out notice. An updated privacy notice must be sent at least once annually. Privacy notices other than the initial privacy notice may state categories of information that, and recipients to whom, the institution reserves the right to disclose consumers' personal financial information. A licensee representing the institution may be held accountable for his/her willful disclosure of protected personal information.
Capacity to Contract for Insurance
An individual who is at least 15 years old can contract for life or accident and health insurance for their self or anyone in whom they have an insurable interest. These contracts can be for their own interest or the benefit of their parents, spouse, children, siblings, or grandparents.
Unfair Claim Settlement Practices fines
An insurer that violates the Unfair Claim Settlement Act is subject to discipline by the Commissioner and a possible fine of $100-$5,000.
Producer
Any individual, general partnership, general corporation, or limited liability company that, for compensation, acts in any manner in soliciting applications for insurance or negotiating insurance on behalf of an insurer. Anyone practicing as a producer, consultant, customer service representative, limited insurance agent, managing general agent, surplus lines broker, fraternal benefit society representative, or life insurance solicitor must be properly licensed to transact insurance business in Oklahoma.
Credit Life, Accident and Health Provisions
Every individual policy or group certificate of credit life or credit accident and health insurance delivered or issued for delivery in Oklahoma must include: The name and home office address of the insurer The name of the insured The full amount of premium or total identifiable insurance charge to the debtor, stated separately for credit life insurance, credit accident and health insurance, and for any additional benefits or the method used for computing insurance charges from time to time The amount of insurance coverage The amount of debt The effective date of termination, which may not extend more than 15 days beyond the scheduled maturity date of the indebtedness, except when extended without additional cost to the debtor Description of coverage All exceptions, limitations and restrictions to the coverage A statement that the benefits, to the extent necessary to extinguish the unpaid amount of the indebtedness, will be paid to the creditor as first beneficiary, and will be applied by the creditor to reduce or extinguish such indebtedness A statement indicating that upon discharge of the indebtedness, the insurance may be terminated, and that in all cases of termination prior to scheduled maturity, a refund of any unearned amount of premium paid by or charged to the debtor for insurance will be paid to the debtor, or to the debtor's estate if the debtor is not living A statement that the debtor may terminate the insurance and receive, at the option of the insurer, either a refund or credit against indebtedness for all insurance charges or premium paid, by mailing or delivering written notice of termination to the insurer or creditor within 10 days of delivery of the policy or certificate to the debtor. The statement must be set forth in a separate statement or enclosure delivered with the policy or certificate, or, it must appear immediately below the consumer warning.
Temporary license
If a temporary license is issued because of the death or disability of an agent, no insurers can be represented by the temporary licensee in addition to those represented by the deceased or disabled agent. The fee paid for a temporary license cannot be applied upon the fee for any permanent license of the same category issued to the licensee before expiration of the temporary license. No license issued without an examination can be in effect for more than 6 months. The Commissioner may renew the license once upon proper application and for good cause. However, no temporary license can be issued for any line of insurance to any applicant who has failed to pass the required examination.
Hearings
If the Commissioner believes a person has committed or is engaged in any unfair practices, the person will be served with a statement of charges that also will inform them of a time and place for a hearing. At the hearing, the person will have the opportunity to be heard and provide proof for why the Commissioner shouldn't serve them with a cease and desist order. The Commissioner will put into writing their findings and serve/not serve the person with the cease and desist order. A person served with an order can petition the Commissioner to modify or cancel the order. The petition needs to be filed within 30 days from the date they were served with the order.
Unfair Practices or Methods Not Defined
If the Commissioner has reason to believe any person transacting insurance in Oklahoma is using unfair methods of competition not specifically defined by law, he/she can issue the person a statement of the charges and require they appear at a hearing. After the hearing, the Commissioner will make a written report of his/her findings and give it to the person. If the claims are substantiated and the person doesn't cease the practice(s), the Commissioner can file an order for the person to discontinue such acts.
Examination of Books and Records reports
Once an examination has been completed, a written report is filed with the Department of Insurance within 30 days. The Department of Insurance then submits a copy of the report to the insurer, giving the insurer 20 days to make a written rebuttal, if desired. The Commissioner, as the result of an investigation, may determine that regulatory action is needed, and if so, may initiate any actions or proceedings. The Commissioner or appointed representative cannot be sued for any conduct or statement regarding a hearing unless such was outside of his/her duties. Each year, the Commissioner must give reports to the Governor on all insurers that include: Financial status Claim reports Insurers under the supervision of the Department for rehabilitation, conservation, or liquidation
Temporary License issue
The Commissioner may issue a temporary license for a period of 180 days without an examination if he/she deems it necessary for servicing the insurance business to: The spouse or legal representative of a producer who dies or becomes mentally or physically disabled A member or employee of a business entity upon death or disability of an individual designated in the business entity license The designee of a producer who enters the armed forces to serve on active duty An individual for any other circumstance the Commissioner deems appropriate The Commissioner may: Limit the authority of any temporary licensee in any way deemed necessary to protect insureds and the public Require the temporary licensee to have a suitable sponsor who is a licensed producer or insurer and who assumes responsibility for all acts of the temporary licensee and may impose other similar requirements designed to protect insureds and the public Revoke a temporary license if the interest of insureds or the public are endangered. A temporary license may not continue after the owner or the personal representative disposes of the business. If the applicant fails to pass the licensure examination, the temporary license will be terminated.
Resident Producer Qualifications
The application for licensing must be: Made using a form prescribed by the Commissioner Accompanied by a written appointment from the appointing insurer, or submit a personal errors and omissions policy covering himself or herself, or a copy of such policy if maintained by the insurer; all appointments will remain in force until expressly terminated in writing The applicant must: Be at least 18 years old Pay a fee for each examination and license issued. Failure to pay the required license fee when it is due is cause for revocation of the producer's license. Be deemed by the Commissioner to be competent, trustworthy, financially responsible, and of good business and personal reputation Reside within the state of Oklahoma Pass the licensing examination Not intend to write controlled business
Credit Life, Accident and Health Prohibited Practices and Penalties
The following practices are unfair methods of competition: Offering any person a special advantage on any service not set out in a contract entered Agreeing to deposit with a financial institution any of the insurer's money with the intent to take the place of an otherwise required deposit as a compensating balance for a loan Depositing as an inducement to insurance at a rate of interest less than the prevailing rate of interest paid upon passbook savings accounts by a creditor bank or financial institution Collecting the insurance charge by the creditor from the debtor on a single premium basis and remitted to the insurer by the creditor on any basis other than a single premium basis
Unfair Practices and Frauds - False Statements and Entries
Knowingly placing before the public any false material statement as to the financial condition or dealings of any person engaged in insurance is illegal. This also includes knowingly omitting true, material facts pertaining to any insurance transaction, in a book, report or statement.
Controlled Business
The Commissioner will not grant, renew, continue, or allow to continue any license that is or will be used to solicit controlled business. Controlled Business is defined as insurance written on the interests of: The licensee; or His or her relatives to the second degree His or her employer A corporation, association, or partnership of which the licensee or a member of the licensee's immediate family is an officer, director, substantial stockholder, partner, associate, or employee The officers, directors, substantial stockholders, partners, or employees of such a corporation, association, or partnership Controlled business is said to have occurred if the producer's commissions from policies sold to the persons listed above exceed 25% of the producer's aggregate commissions earned during any 12 month period. These rules don't apply to title insurance or limited lines producers.
Unfair Practices and Frauds - False Financial Statements
This consists of filing with a supervisory public official or making a false public financial statement pertaining to any insurance transaction in Oklahoma. It includes deliberately omitting true statements of material facts.
Customer Service Representative
A Customer Service Representative is an individual appointed by an insurance producer, surplus lines insurance broker, managing general agent, or insurance agency to assist the insurance producer, broker, or agency in transacting the business of insurance from the office of the insurance producer, broker, or agency, and whose salary may vary based on the production or volume of applications or premium. Any person licensed and appointed as an insurance producer, broker, or managing general agent (except a limited lines producer), and any insurance agency may appoint and employ as customer service representatives any persons who hold or have qualified for a customer service representative's license. No person can be appointed and employed as a customer service representative by more than one appointing insurance producer, broker, or agency at any one time.
Licensing process (businesses)
A business entity acting as an insurance producer is required to obtain an insurance producer license. Before approving the application, the Insurance Commissioner must find that: The business entity has paid the application fees The business entity has designated a licensed producer responsible for the business entity's compliance with the insurance laws, rules, and regulations of this state A domestic business entity is organized pursuant to the provisions of the laws of this state and maintains its principal place of business in this state; and No person whose license as an insurance producer has been revoked by order of the Commissioner, nor any business entity in which such person has a majority ownership interest, whether direct or indirect, owns any interest in the business entity licensed as an insurance producer
Documents for Electronic Delivery
A document can be delivered electronically if: The party has consented to this method of delivery and has not withdrawn the consent The party, before giving consent, is provided with a clear and conspicuous statement informing the party of: The right of the party to withdraw consent to have a notice or document delivered by electronic means, at any time, and any conditions or consequences imposed in the event consent is withdrawn The types of notices and documents to which the party's consent would apply The right of a party to have a notice or document delivered in paper form The procedures a party must follow to withdraw consent to have a notice or document delivered by electronic means and to update the party's email address Prior to consent, the party is given hardware/software requirements, and then within the act of consent, proves they can access the information in electronic form (this would be a test they would run to make sure their device can access the documents) The insurer provides alerts letting the person know when software/hardware updates need to be made.
Limited Lines Producer
A limited lines producer (the same as a limited insurance representative) may receive qualification for a license in one or more of the following categories: Prepaid legal liability insurance, which is the assumption of an enforceable contractual obligation to provide specified legal services or to reimburse policyholders for specified legal expenses, pursuant to the provisions of a group or individual policy Crop - Insurance providing protection against damage to crops from unfavorable weather conditions, fire or lightning, flood, hail, insect infestation, disease or other yield-reducing conditions or perils provided by the private insurance market, or that is subsidized by the Federal Crop Insurance Corporation, including Multi-Peril Crop Insurance Car Rental - Insurance offered, sold or solicited in connection with and incidental to the rental of rental cars Credit - Credit life, credit disability, credit property, credit unemployment, involuntary unemployment, mortgage life, mortgage guaranty, mortgage disability, guaranteed automobile protection insurance, or any other form of insurance offered in connection with an extension of credit that is limited to partially or wholly extinguishing that credit obligation and that is designated by the Commissioner as limited line credit insurance Surety - Insurance or bond that covers obligations to pay the debts of, or answer for the default of another, including faithlessness in a position of public or private trust. For purpose of limited line licensing, surety does not include surety bail bonds. Travel - Insurance coverage for personal risks incidental to planned travel, including, but not limited to interruption or cancellation of trip or event, loss of baggage/personal effects, damage to accommodations/rental vehicles, or sickness, accident, disability or death occurring during travel
Requirements For License
A nonresident person will receive a nonresident producer license if the person: Is currently licensed as a resident and in good standing in that person's home state Has submitted the proper request for licensure and has paid the fees required Has submitted or transmitted to the Insurance Commissioner the application for licensure that the person submitted to the person's home state, or in lieu of the same, a completed Uniform Application; and Is from a home state that awards nonresident producer licenses to residents of Oklahoma on the same basis. Any nonresident application submitted will constitute the applicant's designation of the Commissioner as the person upon whom may be served all lawful process in any action, suit, or proceeding instituted by or on behalf of any interested person arising out of the insurance business of the applicant in this state. This designation constitutes an agreement that said service of process is of the same legal force and validity as personal service of process in this state upon the nonresident licensee.
Licensing process
A person applying for a resident insurance producer license shall make application to the Insurance Commissioner. Before approving the application, the Insurance Commissioner shall find that the individual: Is at least 18 years of age Has not committed any act that is a ground for denial, suspension, or revocation Has paid the fees Has passed the examinations for the lines of authority for which the person has applied Any applicant must also demonstrate to the Commissioner that they are competent, trustworthy, financially responsible, and of good personal and business reputation. The Commissioner may require any documents reasonably necessary to verify the information contained in an application.
Change of Address
A producer must notify the Commissioner within 30 days of any change in legal name, address, or email address. Failure to do so will result in a $50 penalty. The Commissioner may place on probation, censure, suspend, revoke or refuse to issue or renew a license if a producer fails to notify the Commissioner of the change within 45 days
License Fees
A producer, limited lines producer, surplus lines broker, customer service representative, managing general agent, and consultant must renew their licenses every 24 months. Renewal fee for all licenses is the same as the current initial license fee, as seen below. The renewal fee for late or incomplete applications is double the standard fee. The Commissioner may waive licensing fees in extraordinary circumstances for a class of producers where the Commissioner deems that the public interest will be best served.
Managing General Agent
An individual, corporation, or partnership that is appointed as an independent contractor by 1 or more insurers, to exercise general supervision over each insurer's business in Oklahoma. The managing general agent has the authority to appoint and terminate producers for the insurer
Payment or Acceptance of Commission
A surplus lines licensee or broker may accept and place surplus lines insurance from any insurance agent or broker licensed in Oklahoma for the kind of insurance involved, and may compensate such agent or broker. The insurance agent or broker can receive from the surplus lines insurer the customary commission. An insurance company/producer cannot pay a commission, service fee, brokerage or other valuable consideration to a person for selling, soliciting, or negotiating insurance in Oklahoma if that person is required to be licensed, but is not. Furthermore, a person shall not accept a commission, service fee, brokerage or other valuable consideration for selling, soliciting or negotiating insurance in Oklahoma if that person is required to be licensed, but is not. Renewal or other deferred commissions may be paid to a person for selling, soliciting or negotiating insurance in Oklahoma if the person was required to be licensed at the time of the sale, solicitation, or negotiation, and was so licensed at that time. An insurer/insurance producer may pay or assign commissions, service fees, brokerages or other valuable consideration to an insurance agency or to persons who do not sell, solicit, or negotiate insurance in this state, unless the payment would be considered an unfair or deceptive act.
Lapse license
An individual insurance producer who allows their license to lapse may, within 12 months from the due date of the renewal fee, reinstate the same license without the necessity of passing a written examination unless the license was revoked, suspended, or continuation thereof was refused by the Commissioner. However, a penalty in the amount of double the unpaid renewal fee shall be required for any renewal fee received after the due date. Continuing education requirements must be kept current. A licensed insurance producer who is unable to comply with license renewal procedures due to military service or some other extenuating circumstance, such as a long-term medical disability, may request a waiver of those procedures. The producer may also request a waiver of any examination requirement or any other fine or sanction imposed for failure to comply with renewal procedures. The license must contain the licensee's name, address, personal identification number, and the date of issuance, the lines of authority, the expiration date and any other information the Insurance Commissioner deems necessary.
Credits for Instructors
An instructor who is a licensee will receive the same CE credit for presenting approved course materials as a licensee who attends an approved classroom instructional session by including his/ her name and license number on roster.
Qualifications
An applicant may qualify as a resident if the applicant resides in this state. Any license issued for an application claiming residency in this state is void if the licensee, while holding a resident license in this state, also holds or makes application for a license in or thereafter claims to be a resident of any other state. However, if the applicant is a resident of a community or trade area, the border of which is contiguous with the state line of this state, the applicant may qualify as a resident in such other state and may hold a resident license from each state, so long as both states are party to a reciprocal dual licensing agreement. A license issued to a nonresident of this state grants the same rights and privileges afforded a resident licensee, except as otherwise provided for by law. Service of process upon any such licensee in any action or proceeding instituted by the Commissioner must be made by the Commissioner by mailing the process with return receipt requested to the licensee at the licensee's last-known address of record or principal place of business. Service of process, other than a subpoena, upon any nonresident licensee is sufficient, provided notice of the service and a copy of the process are sent within 10 days thereafter to the licensee at the licensee's last-known address of record or principal place of business by mail with return receipt requested. A person who has been convicted of any criminal felony involving dishonesty or a breach of trust, or who has been convicted of an offense under the Violent Crime Control and Law Enforcement Act, cannot engage or participate in the business of insurance—unless they have the written consent of the Commissioner.
Appointment Procedures
An insurance producer cannot act as an agent of an insurer unless the insurance producer becomes an appointed agent of that insurer. An insurance producer who is not acting as an agent of an insurer is not required to become appointed. To appoint a producer as its agent, the appointing insurer, or an authorized representative of the insurer, must file, in a format approved by the Insurance Commissioner, a notice of appointment within 15 days from the date the agency contract is executed or the first insurance application is submitted. An insurer or authorized representative of an insurer may also elect to appoint a producer to all or some insurers within the insurer's holding company system or group by the filing of a single appointment request. Upon receipt of the notice of appointment, the Insurance Commissioner will verify within a reasonable time, not to exceed 30 days, that the insurance producer is eligible for appointment. If the insurance producer is determined to be ineligible for appointment, the Commissioner will notify the insurer and the authorized representative of the insurer within 5 days of its determination. An insurer or authorized representative of an insurer must pay a $30 appointment fee for each insurance producer appointed by the insurer. It is unlawful for any insurer to discriminate among or between the insurance producers it has appointed. Any person or company convicted of violating any of these laws will be guilty of a misdemeanor and punished by a fine of no more than $500, or imprisonment in the county jail 6-12 months, or be fined and imprisoned.
Proof of Loss
An insurer must furnish, upon written request of any insured, forms of proof of loss for completion by the insured. The insurer cannot have any responsibility for completion of these forms. It's the duty of the insurer receiving a proof of loss to submit a written offer of settlement or rejection of the claim to the insured within 60 days of receipt of that proof of loss. When any insurance policy contains a provision that the insured must provide a written sworn proof of loss within 60 days from the date of the loss to the insurer, or it's required by law to be provided, the insurer cannot blame the failure of insured to provide the proof of loss as a defense in any litigation or court proceeding, unless the insurer can prove it furnished the insured with two blank forms for the execution of proof of loss. The forms must be provided to the insurer within 60 days of the insured receiving them.
Unfair Practices and Frauds - Twisting
Attempting to induce the lapse, forfeiture, exchange, conversion, or surrender of a policy or annuity through misrepresentation.
Disciplinary actions fees
In addition to or in lieu of any applicable denial, probation, censure, suspension or revocation of a license, a person may, after an opportunity for a hearing, be subject to a civil fine of $100-$1,000 for each occurrence.
Credit Life insurance
Credit insurance is sold in connection with a credit contract with installment payments scheduled for less than 15 years. The coverage is designed to terminate the debt upon the premature death of the debtor, or provide payments on loans that become due while the debtor is disabled. The person processing the indebtedness contract must inform the debtor of coverage criteria before completion of the contract. The debtor has the right to furnish the insurance either through the insurer of his/her choice or through assignment of an existing policy written on the life of the debtor. If the debtor so decides, the insurance may be written as a group policy through the lending institution's carrier. The policy or certificate must be delivered no later than 30 days after the insurance commences. The creditor will notify the insured, in writing, within 30 days of the application for insurance if there is any delay in providing coverage.
Insurance Information and Privacy Protection
Each financial institution must develop and implement safeguards to protect the security, confidentiality, and integrity of customer information. The Oklahoma Insurance Department must establish standards for the safeguards to ensure the information's security and confidentiality are protected from harm and from unauthorized access. Customer information that must be protected includes nonpublic personal, financial, and health information.
Continuing Education (CE)
Each producer must comply with state continuing education requirements by completing 24 credit hours every 24 months (the amount of time for a licensing period) in approved courses. The 24-month period begins the day after the license is granted. 3 of the 24 credit hours must be in ethics, and at least 2 of the required hours must be on state/federal legislative updates. Examinations can be written or oral. The required credit hours must be completed after the last date that the producer renewed his/her license. A newly licensed producer completes the credit hours 2 years after his/her license was issued. A maximum of 6 excess credit hours can carry forward into the next licensure period. CE credit is electronically reported within 10 business days of course completion. Failure to comply may result in censure, suspension, nonrenewal of license or a civil penalty of up to $500, or both. The Commissioner can grant 1 hour of CE credit for membership in a local, regional, or national professional insurance organization or association. A producer who participates in an approved professional designation program prior to renewal is deemed to have met the biennial requirement for CE. The curriculum for the program must consist of at least 24 hours within a 24-month period.
Policy Document Electronic Delivery
Electronic delivery refers to delivery of documents to an email address or posting of documents to a website. This method of delivery is equivalent to any required delivery method, including delivery by first class mail; first class mail, postage prepaid; certified mail; certificate of mail; or certificate of mailing. The legal effectiveness, validity, or enforceability of any contract or policy of insurance executed by a party may not be denied solely because of the failure to obtain electronic consent or confirmation of consent of the party. An insurer shall deliver a notice or document by any other delivery method permitted by law other than electronic means if it attempts to deliver the notice or document by electronic means and has a reasonable basis for believing that the notice or document has not been received by the party.
Oklahoma Producer Licensing Act (Purpose)
Every insurance producer, customer service representative, or limited lines producer who solicits or negotiates an application for insurance of any kind will, in any controversy between the insured/the insured's beneficiary and the insurer, be regarded as representing only the insurer. Every surplus lines insurance broker who solicits an application for insurance of any kind will, in any controversy between the insured or the insured's beneficiary and the insurer issuing any policy upon such application, be regarded as representing the only insured or the insured's beneficiary. Any company that delivers in this state to any insurance broker a policy of insurance pursuant to the application or request of such broker, acting for an insured other than himself or herself, has authorized such broker to receive on its behalf, payment of any premium which is due on such policy of insurance at the time of its issuance or delivery.
Oklahoma Producer Licensing Act (Commissions)
Every licensed insurance producer is entitled to commissions on all premiums collected for group insurance policies negotiated by the insurance producer on behalf of an insurer, and an insurer shall be required to pay such commissions to the insurance producer, except entitlement to commissions shall automatically terminate without notice, effective on the date of the occurrence of any of the following events: The insurance producer's license to engage in accident and health insurance business is terminated or revoked by the State of Oklahoma or any other public authority due to fraud or embezzlement Material breach of the insurance producer's contract with the account or insurer, excluding production requirements Termination of the insurance producer's "Agent of Record" relationship with the employer or account Death of the insurance producer, unless the contract between the insurer states otherwise or the right to the commission has vested Recovery of such commissions will be through civil action.
Examination of Books and Records
Every licensee must keep at their place of business all records pertaining to transactions authorized by their license. These records must be kept available and open to the inspection of the Commissioner at any time during business hours during the 3 years immediately following the date of completion of the transaction. The Commissioner may require a financial or market conduct examination during any investigation of a licensee. The cost of such examination will be divided among all of the appointing insurers of the licensee. The Commissioner or an appointed representative: Will examine domestic insurers as often as he/she deems appropriate, but at least once every 5 years May examine the directors, officers, producers, employees, or any other persons in reference to any matters relating to an investigation The insurer being examined must: Make all books and records relating to its business available to the Commissioner or his/her appointed representatives Pay the expenses incurred by the Department of Insurance for the examination
Records requirements
Every licensee must keep at their place of business the usual and customary records pertaining to transactions authorized by the license. All records as to any particular transactions must be kept available and open to the inspection of the Commissioner at any time during business hours during the 3 years immediately following the date of completion of the transaction. The Commissioner may require a financial or market conduct examination during any investigation of a licensee. The cost of such examination shall be divided among all of the appointing insurers of the licensee. The Insurance Commissioner can punish any person who is under investigation for or charged with a violation of the Oklahoma Producer Licensing Act, even if the person's license or registration has been surrendered or has lapsed by operation of law. Files pertaining to ongoing investigations or legal matters regarding a licensed agent are not available for public inspection without judicial authorization. However, a licensee under investigation may view evidence and complaints pertaining to the investigation at the Commissioner's office. Any licensee who ceases to maintain residency in this state shall, within 10 days after terminating residency, deliver their license to the Commissioner by personal delivery or by mail with return receipt requested. The Commissioner may issue a duplicate license for any lost, stolen, or destroyed license issued upon an affidavit of the licensee prescribed by the Commissioner concerning the facts of such loss, theft or destruction. If the Commissioner finds that a manager or officer of a corporation employing the licensee knew or should have known of the violation committed by the individual licensee, he/she can suspend, revoke, or not renew the license of the corporation.
Time Extension
For good cause shown, the Commissioner may grant an extension of time. The extension cannot exceed 12 months. The extension will not alter the requirements or due date of the subsequent 24-month licensing period. Each request for extension of time must be in writing from the licensee and include details and any documentation to support the request. Each request must be received by the Commissioner no less than 30 days before the expiration of the twenty-four month licensing period. A producer can repeat a course within the 24-month period if he/she didn't earn the maximum credits for the course. Furthermore, a producer can repeat a course after 2 years and receive the maximum credits for the course.
Cease and desist
If a person affected by a cease and desist order seeks to contest that order, the person may request a hearing before the Commissioner no later than the 30th day after the date on which the person receives the order. A request to contest an order must be in writing and directed to the Commissioner and must state the grounds for the request to set aside or modify the order. Upon receiving the request for a hearing, the Commissioner will serve notice of the time and place of the hearing at which the person will have the opportunity to prove why the order should not be affirmed. The hearing is to be held no later than the 10th day after the date the Commissioner receives the request for a hearing unless the parties mutually agree to a later hearing date. Pending the hearing, a cease and desist order continues in full force and effect unless the order is stayed by the Commissioner. A cease and desist order becomes final 31 days after the date it is received if the person affected by the order does not request a hearing
Disciplinary actions hearings
In the event that the action by the Insurance Commissioner is to nonrenew or to deny an application for a license, the Insurance Commissioner will promptly notify the applicant or licensee and advise the applicant or licensee, in writing, of the reason for the denial or nonrenewal of the applicant's or licensee's license. The applicant or licensee may make written demand upon the Insurance Commissioner within 30 days of the date of notification of said notification by the Insurance Commissioner for a hearing before the Insurance Commissioner or an independent hearing examiner to determine the reasonableness of the Insurance Commissioner's action. The hearing shall be heard within a reasonable time period and shall be held pursuant to the Oklahoma Administrative Procedures Act. The license of a business entity may be suspended, revoked, or refused if the Insurance Commissioner finds, after an opportunity for a hearing, that an individual licensee's violation was known or should have been known by one or more of the partners, officers, or managers acting on behalf of the partnership or corporation, and the violation was neither reported to the Insurance Commissioner nor corrective action taken.
Unfair Claims Settlement Practices Act
Insurers must respond within 30 days to any pertinent written communication, including email and other electronic communications, from a claimant if the communication reasonably suggests that a response is expected. Producers and insurers must respond to any inquiry from the Commissioner within 30 days from the date of the inquiry.
Unfair Practices and Frauds - Misrepresentation
It is an unfair trade practice to make or distribute an estimate, illustration, circular, statement, sales presentation, omission, or comparison that: Misrepresents the terms or benefits of any policy issued or to be issued (giving illustrations that inflate policy values) Makes any misleading statement as to the dividends paid on similar policies Makes any misleading representation as to the financial condition of any insurer Uses any name or title of any policy that misrepresents the true nature of the policy Makes any misrepresentation to any policyowner to induce the policyowner to lapse, forfeit, or surrender his/her existing insurance
Unfair Practices and Frauds - Unfair Discrimination
Making or permitting any unfair discrimination between individuals of: The same class and equal expectation of life in the rates charged for any contract of life insurance or of life annuity or in the dividends or other benefits payable thereon, or in any other of the terms and conditions of such contract The same class and of essentially the same hazard in the amount of premium, policy fees, or rates charged for any policy or contract of accident or health insurance or in the benefits payable thereunder, or in any of the terms or conditions of such contract, or in any other manner whatever
License Required (Resident/Nonresident)
No such authority is required for an insurer formerly licensed in Oklahoma and now licensed in another state as a resident insurer, or who has merged with an insurer in another state, to enable it to investigate and settle losses under its policies lawfully written in Oklahoma, or to liquidate such assets and liabilities of the insurer (other than collection of new premiums) as may have resulted from its former authorized operations in Oklahoma. An insurer who has relocated in another state or has merged with an insurer in another state and is not transacting new insurance business in Oklahoma, but continuing collection of premiums on and servicing of policies remaining in force as to residents of or risks located in Oklahoma, is transacting insurance in Oklahoma for the purpose of premium tax requirements only and is therefore not required to have a certificate of authority. As to an insurance coverage on a subject of insurance not resident, located, or expressly to be performed in Oklahoma at time of issuance, and solicited, written, and delivered outside Oklahoma at the time of issuance, no such authority shall be required of an insurer as to subsequent transactions in Oklahoma on account thereof, and the provisions of this Code shall not apply to such insurance or insurance coverage, except for the purpose of premium tax requirements.
Nonresident Producer Qualifications
Persons who are not legal residents of Oklahoma may be licensed to act in the state as a nonresident producer or broker without taking a written examination, providing: Verification that he/she has passed a similar exam in his/her state of residence The other state certifies that the applicant currently holds a valid license The applicant's resident state accepts Oklahoma resident producers as eligible for licensing He/she grants the Oklahoma Commissioner a limited power of attorney to accept legal process for any action suit or proceeding regarding his/her insurance business transactions
License fees amounts
Resident insurance producer's license: $60 biennially (every 2 years) Nonresident insurance producer's license: $100 biennially Variable products producer's license: $60 biennially Limited lines producer's license: $40 biennially Insurance producer's license: $60 biennially Temporary license: $20 Managing general agent's license: $60 biennially Surplus lines broker's license: $100 biennially Consultant's license: $100 biennially Customer service representative's license: $40 biennially Duplicate license: Half the cost of the original license Late/incomplete application: Double the cost of the original license Appointment fee: $30 annually, per license (paid by the insurer).
Insurance Commissioner qualifications
The Commissioner is the Chief Executive and Administrative Officer of the Insurance Department and is elected by the public. The Governor may appoint an interim Commissioner if the elected Commissioner leaves office. To run for Commissioner, a person must be at least 25 years of age, have been an Oklahoma resident for at least 5 years, and have at least 5 years of experience in the insurance industry.
Insurance Commissioner Duties & Powers
The Commissioner's duties and powers are administration and law enforcement including: Enforcing insurance laws Issuing Certificates of Authority to insurance companies that have complied with the laws of this state Issuing, refusing, revoking, or suspending licenses or Certificates of Authority Conducting licensing and examinations of insurers and producers Regulating computation of reserve liabilities of insurers Enforcing taxation of insurers Performing all duties in a manner that is in the best interest of the general public and insurance companies Regulating the internal affairs of the Department of Insurance Examining the financial condition and affairs of insurers whenever deemed necessary (including insurance producers, insurance holding companies, domestic and foreign insurance companies) Appointing such additional actuaries, attorneys, deputies, examiners, assistants, stenographers, reporters and other employees as he/she sees fit
Insurance Commissioner additional Duties & Powers
The Commissioner, appointed assistants, or employee's of the Department are not individually liable, except to this state, for any act in connection with the performance of their duties. Neither the Commissioner nor any deputy, actuary, or assistant acting on behalf of the Commissioner can have any interest in any insurance company other than as a policyholder. At the end of each fiscal year, the Commissioner must make a report to the Governor summarizing his/her work during the year.
Disciplinary Actions
The Insurance Commissioner may place on probation, censure, suspend, revoke, or refuse to issue or renew a license issued; or may levy a civil penalty for any one or more of the following causes: Providing incorrect, misleading, incomplete, or materially untrue information in the license application Violating any insurance laws, or violating any regulation, subpoena or order of the Insurance Commissioner or of another state's Insurance Commissioner Obtaining or attempting to obtain a license through misrepresentation or fraud Improperly withholding, misappropriating, or converting any monies or properties received in the course of doing insurance business Intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance Having been convicted of a felony Having admitted or been found to have committed any insurance unfair trade practice or fraud Using fraudulent, coercive, or dishonest practices, or demonstrating incompetence, untrustworthiness, or financial irresponsibility in the conduct of business in this state or elsewhere Having an insurance producer license, or its equivalent, denied, suspended, censured, placed on probation or revoked in any other state, province, district, or territory Forging another's name to an application for insurance or to any document related to an insurance transaction Improperly using notes or any other reference material to complete an examination for an insurance license Knowingly accepting insurance business from an individual who is not licensed Failing to comply with an administrative or court order imposing a child support obligation Failing to pay state income tax or comply with any administrative or court order directing payment of state income tax The Commissioner may not authorize the license renewal for any of these reasons or if the licensee has failed to comply with the continuing education requirements.
Penalty for Violations
The Insurance Commissioner, upon finding an insurer in violation of any provision of the Unfair Claims Settlement Practices Act, will issue a cease and desist order directing the insurer to stop such unlawful practices. If the insurer refuses or fails to comply with said order, the Commissioner can revoke or suspend the insurer's certificate of authority. The Commissioner also has the authority to limit, regulate, and control the insurer's line of business, the insurer's writing of policy forms or other particular forms, and the insurer's volume of its line of business or its writing of policy forms or other particular forms.
Unfair Claim Settlement Practices
The following acts are considered unfair or improper claim settlement practices: Failure to disclose to first-party claimants all pertinent benefits under the policy when a claim is presented Denying a claim because the insured failed to submit a written notice of loss within a specified period, unless this failure operates to prejudice the rights of the insurer Requesting the insured to sign a release that extends beyond the subject that gave rise to the claim Failing to adopt and implement standards for the prompt investigation and settlement of claims arising under an insured's policies Failing to reimburse all clean claims of an insured, an assignee of the insured, or a health care provider within 45 calendar days after receipt of the claim by the insurer Issuing checks or drafts in partial settlement of a loss or claim under a specified coverage which contain language releasing an insurer or its insured from its total liability Violating the provisions of the Health Care Fraud Prevention Act Compelling policyholders to institute litigation to recover amounts due by offering substantially less than the amounts recovered in actions brought by legal process
Additional Unfair Claim Settlement Practices
The following acts are considered unfair or improper claim settlement practices: Requesting a refund of all or a portion of a payment of a claim made to a claimant or health care provider more than 24 months after the payment is made, unless: The payment was made because of fraud committed by the claimant or health care provider The claimant or health care provider has otherwise agreed to make a refund to the insurer for overpayment of a claim Failing to pay, or requesting a refund of a payment, for health care services covered under the policy if a health benefit plan, or its agent, has provided a preauthorization or precertification and verification of eligibility for those health care services, unless The claim or payment was made because of fraud committed by the claimant or health care provider The subscriber had a preexisting exclusion under the policy related to the service provided The subscriber or employer failed to pay the applicable premium and all grace periods and extensions of coverage have expired Denying or refusing to accept an application for life insurance, or refusing to renew, cancel, restrict or otherwise terminate a policy of life insurance, or charge a different rate based upon the lawful travel destination of an applicant or insured Knowingly misrepresenting pertinent facts or policy provisions Denying payment to a claimant because services, procedures or supplies provided by a treating physician or hospital were not medically necessary Compensating a reviewing physician based on a percentage of the amount by which a claim is reduced for payment Failing to keep a complete record of all complaints that the insurer has received during the preceding 3 years
Exemption from Examination
The following are exempt from the requirement for an examination, if the Commissioner determines that the applicant is aware and able to fulfill the responsibilities of the license: Any limited lines producer; and A title insurance producer licensed prior to November 1, 2006, who is an applicant for an aircraft title producer license. A person licensed as an insurance producer in another state who moves to this state must make application to become a resident licensee within 90 days of establishing legal residence in Oklahoma. No examination or CE is required of that person to obtain resident licensing for any line of authority held by the licensee in the prior state on the date legal residency was established in this Oklahoma, except where the Commissioner determines otherwise.
Oklahoma Life and Health Guaranty Association Act limitations
The following are the greatest amounts of the Association's liability by type of benefit involved: Life insurance cash surrender and withdrawal values $100,000 Life insurance death benefit $300,000 Disability of Long-Term Care $300,000 Basic hospital, medical and surgical insurance $500,000 All other health coverages $100,000 Present annuity values, cash or withdrawal $300,000 Total health insurance benefits, except for basic medical and surgical insurance $300,000 With few exceptions, the Association covers all direct group and individual life, health and annuity policies issued by its members. The association is not liable for any additional or punitive damages such as attorney's and court fees.
Oklahoma Life and Health Guaranty Association Act
The purpose of the Life and Health Guaranty Association is to protect insureds, policyowners, and beneficiaries from the insolvency of an insurance company. The Association is under the direct supervision of the Commissioner and consists of all life and health insurers authorized to transact business in Oklahoma. It is considered an unfair trade practice for a person or insurer to use this membership in any way to influence a prospective buyer, or to attempt to influence the public by advertising the membership. Continued membership is a condition of continuing authority in Oklahoma and in the event of a claim, members are assessed funds to meet the contractual obligations of the insolvent insurer. The membership does not include nonprofit hospital or medical service organizations.
