State Laws

Appointment Procedures

Agent Appointment A producer must be duly appointed in order to act as agent for any insurer. Insurers must file notice and pay a $20 fee for every appointment. Notice must be submitted to the Superintendent within 30 days from the date the agency contract is executed, or from the date the first application is submitted, whichever is earlier. By appointing an agent, an insurer certifies that the person is competent, financially responsible, and suitable to represent the insurer, and that the appointment is not for the purpose of writing controlled business. An insurer is bound by the acts of the appointed person's actual and apparent authority. Appointments automatically renew on July 1st of each year unless terminated by the insurer. Cancellation of Appointment All of an agent's appointments are automatically void if their license is surrounded, revoked, or suspended. If the agent is issued a new license or their previous license is reinstated, all appointments must be re-obtained as new appointments. Termination Notification An insurer that terminates the appointment of, employment of, or contract with an agent must notify the Superintendent within 30 days after the termination effective date. Notification must include any relevant information, documents, or records. Within 15 days after notifying the Superintendent, the insurer must mail a copy of the termination notification to the agent at the agent's last known address. If termination is for an act that is grounds for Department disciplinary action, the insurer must also: Promptly give the Superintendent any additional information later discovered by the insurer Send the notification to the terminated agent by certified mail with return receipt requested and postage prepaid, or by overnight delivery using a nationally recognized carrier An agent has 30 days after receiving notification to file written comments with the Superintendent. Any comments filed must also be provided to the insurer at the same time. These comments become part of the Department file on the agent and must accompany every report about the agent.

Insurance Information Privacy

All applicants/policyholders must be provided with a notice of information practices in connection with insurance transactions, as follows below. If the transaction is an insurance application, the notice must be provided: Upon policy delivery, if personal information came only from the applicant or public records When collection of personal information starts, if collection comes from any other sources If the transaction is a policy renewal, the notice must be provided by the policy renewal date. However, there is no notice required for a renewal if either of the following are true: Personal information was collected only from the policyholder or from public records The required notice was already given to the policyholder within the last 24 months If the transaction is a policy reinstatement or a change in insurance benefits: Notice is not required if personal information comes only from the client or public records If required, the notice must be provided when the request is received by the insurer The notice must be in writing and must state all of the following: Whether personal data may be collected from persons other than the proposed insured(s) The type of personal information that may be collected and the types of sources and investigative techniques that may be used A description of the insured's rights and the manner in which such rights may be exercised That any information obtained from a report prepared by an insurance support organization may be retained by the insurance support organization and/or disclosed to other persons The types of disclosures allowed and the circumstances under which such disclosures may be made without prior authorization. (However, the only circumstances that need to be described are those that occur so often as to indicate a general business practice.) An abbreviated notice can be used if it includes all of the following disclosures: Personal information may be collected from persons other than the proposed insured(s) Personal or privileged information collected by the insurance institution or agent may, in certain circumstances, be disclosed to third parties without authorization A right of access and correction exists with respect to all personal information collected The full notice will be furnished to the applicant or policyholder upon request No insurer, agent, or insurance support organization can disclose information about a person obtained in connection with an insurance transaction without their consent, EXCEPT: To an insurance regulatory authority To a consumer reporting agency To a law enforcement or other governmental authority In response to an administrative or judicial order, including a subpoena or search warrant To conduct actuarial or research studies To a party to a proposed/actual sale or merger of the insurer, agency, or support organization For marketing of a product or service, and where no personal information is released Where the information will only be used as regards the audit of the insurer or agent To a governmental authority, to determine an individual's eligibility for government benefits To a certificate/policyholder for the purpose of relaying the status of an insurance transaction To a lienholder, mortgagee, lessor, or other party with a legal or beneficial interest in a policy Using false pretenses to acquire information from an insurance company, agent, or insurance support organization is a 4th-degree felony.

Change in Name, Address, Email, Telephone Number

All licensees must file a change of address with the Superintendent within 30 days after the change. Any change in name, phone number, or email must also be reported to the Superintendent within 30 days. A licensed resident agent who moves to another state must file a change of address with the Superintendent and provide certification from the new state within 30 days after making the change. If the agent complies with these requirements, their license will be changed to a nonresident license with no fee or application required.

Temporary License

Under certain circumstances the Superintendent may issue a Temporary License, which is valid for up to 180 days and does not require an exam. The Superintendent may issue such a license to the: Spouse or court-appointed representative of an agent who dies or becomes disabled Employee of a business entity, upon the death/disability of the sole remaining licensed agent Designee of a licensed agent entering active service in the U.S. Armed Forces Temporary licensees must be sponsored by a licensed agent or an insurer, who is responsible for all acts of the temporary licensee. A temporary license cannot remain in force if the business being serviced by the temporary licensee is disposed of. Duty to Report Criminal Convictions and Administrative Disciplinary Actions An agent must notify the Superintendent within 30 days whenever the agent is subject to: Administrative action of any kind by another jurisdiction or governmental agency (notification required within 30 days after the final disposition of the matter) Criminal prosecution for any matter other than a minor traffic violation (notification required within 30 days after the agent's first appearance before a judge) Notification must include a copy of the order and any other relevant legal documents. Assumed Business Names An agent who intends to do business in Ohio under any name other than their own legal name must notify the Superintendent before using or doing any business under the assumed name.

Continuing Education (CE)

A license cannot be renewed if the license holder has not fulfilled continuing education requirements. Major lines (Life, Property, Casualty, Personal Lines, Accident & Health, Variable Products) require 24 hours of CE, 3 hours of which must be ethic-specific. Title and Surety Bail Bond lines have their own CE requirements, and Limited Lines licenses do not have any CE requirements. Exemptions Additionally, the following individuals are exempt from Ohio CE requirements: Nonresident agents, who instead follow the CE requirements of their home state Licensees who have been granted inactive status by the Superintendent Licensees who have been approved for a renewal extension. Reporting At least 1 month before their license expiration date, agents will receive a renewal notice from the Department. For resident agents, this notice will also state whether the agent has completed their required CE hours. Failure to receive a renewal notice does not relieve the licensee of the responsibility to file the CE report in a timely manner. Required CE credits must be posted on the licensee's Department record before a license can be renewed. Credits are considered earned on the date the licensee finished the course, not the date they are posted to the licensee's record. It is the responsibility of the licensee to prove they have completed required CE hours and complied with reporting rules. Credits To qualify for CE credit, both the course and provider must be approved by the Superintendent. The Superintendent may grant credit for courses taken before approval was officially issued. CE credit cannot be carried over from another state. Courses cannot be taken twice during the same compliance period, but can be retaken in a different compliance period. Partial credit for classroom courses may be given only at the provider's option. Agents who complete more than the required number of hours in a renewal period may apply those hours to the next period, up to 50% of the required hours for the next period. CE hours earned during the late renewal period or reinstatement period may be used to meet the CE requirements necessary for that renewal. Credit for Publication, Instruction and Association Events Individual licensees can receive up to 10 hours of CE credit per period for authoring published articles or books on matters directly related to insurance. Written request to the Superintendent is required and must include proof of authorship and publication. Licensees who author instructional materials used in approved courses may be granted credit up to the number of CE hours for which the course is approved, and only one time per course. Written request to the Superintendent is required and must include proof of authorship. Licensees who teach approved courses may be granted CE credit once per course per period, and at the rate of two times the number of hours actually spent instructing. Persons who author material for and teach the same course in 1 compliance period may receive credit either for authoring or for instructing, but not for both activities in 1 compliance period. Up to 4 credits per period can be earned for participation in professional insurance associations.

State Regulation

Acts Constituting Insurance Transactions No person may sell, solicit, or negotiate insurance in Ohio unless licensed in that line of authority. No company may engage in the business of insurance unless it is expressly authorized by the applicable state laws and has complied with those laws. In this legal definition: "Sell" means to provide an insurance contract in exchange for money (consideration) "Solicit" means to try to sell insurance to someone, or to ask or urge a person to apply for a particular kind of insurance from a particular insurer "Negotiate" means to advise someone about the terms, benefits, or conditions of an insurance contract, when the person giving the advice either sells insurance (such as an agent/solicitor) or arranges the sale of insurance (such as a broker) Any of the following acts are defined as an insurance transaction: Issuing or delivering insurance contracts to Ohio residents or businesses Making or proposing to make any insurance contracts Soliciting or receiving any application for insurance Collecting any premium, commission, fee, or other consideration for any insurance contract Disseminating information about coverage or rates, forwarding applications, inspecting risks, fixing rates, investigating/adjusting claims, or otherwise transacting insurance-related matters

Within how many days must an insurer acknowledge claims-related communications from a client?

15 days

Penalties

A license cannot be renewed if CE requirements are not resolved, and so the penalty for failing to complete CE becomes the penalty for failing to renew. A license that is not renewed during its late renewal period becomes suspended and enters the reinstatement period. If the license remains suspended at the end of the reinstatement period, the license is revoked. The agent must go through the licensing process again as a new agent. The following are violations of prelicensing education and CE statutes and rules. Committing any one of these violations is sufficient grounds for the Superintendent to impose a fine of up to $500, or to refuse to issue or renew a license: Knowingly using or submitting any false or deceptive record for compliance purposes Using, obtaining, or accepting false evidence of course completion Cheating, using unauthorized material, or giving/receiving unauthorized help on an exam Persons who exhibit disruptive, threatening, or deceptive behavior in a course or exam may be removed from participating before completion, but in such circumstance the Superintendent can also refuse to accept successful completion of the course or exam During an exam or an exam break, using unauthorized telecommunication devices, notes and study guides, or conversing with unauthorized persons

Which of the following statements about information privacy insurance regulations is FALSE?

Abbreviated notices are prohibited

Class B Offenses

As an agent, it is a Class B offense to: Fail to submit an insurance application within 7 days after accepting a premium Fail to provide a written response to the Department within 21 calendar days after receipt of any written inquiry from the Department Fail to file a change of address within 30 days as required Fail to provide notice of administrative action or criminal prosecution as required For Class B offenses, the Superintendent can order: A fine of up to $25,000 per violation Payment of costs and expenses incurred by the Department in the investigation and action Corrective actions in lieu of or in addition to these That the licensee be allowed to surrender for cause

Requirements

Candidates must complete 20 hours of authorized prelicensing education for each of these exams: Life and Variable Products Accident and Health Property/Casualty Surety Bail Bond Personal Lines Prelicensing education is valid for 180 days. You must pass your state exam within this time frame. Likewise, exam results are valid for 180 days. You must apply for licensure within this time frame.

Cyber Security Requirements

Cyber Security Requirements Each insurer must implement a comprehensive information security plan to minimize the likelihood of harm to consumers. The plan must be based on the specific insurer's risk assessment and designed to protect nonpublic information, such as SSN, credit card number, account password, etc. The plan must be set out in writing, and must: Designate one or more persons responsible for the plan Require assessment of key systems and procedures at least every year Include a written incident response plan to recover from a cyber security event Define and regularly evaluate a schedule for data retention and a safe destruction plan The insurer must also: File certification of plan compliance with the Superintendent by February 15th each year Maintain records of any cyber security event for at least 5 years Notify the Superintendent within 3 business days of determining a cyber event occurred Insurers are exempt if they meet any one of the following criteria: Fewer than 20 employees Less than $5 million in gross annual revenue Less than $10 million in assets at the end of the fiscal year Insurers who stop qualifying for exemption have 180 days to comply with cyber security regulations.

General Grounds for Disciplinary Action

Class A Offenses As an agent, it is a Class A offense for you to: Provide false, misleading, or materially untrue information in a licensing application Violate any insurance law, rule, subpoena, or order of the insurance authority of any state Obtain or try to obtain or maintain a license through misrepresentation or fraud Withhold or misappropriate money/property received in the course of insurance business Knowingly misrepresent the terms or benefits of any real or proposed insurance contract Be convicted of or plead guilty/no contest to any felony, or to a misdemeanor involving:Misuse or theft of money or propertyFraud, forgery, dishonest acts, or breach of a fiduciary dutyMoral turpitude Admit to, or be found to have committed, any insurance unfair trade practice Demonstrate incompetence, untrustworthiness, or financial irresponsibility Have a license (or its equivalent) denied, suspended, or revoked in any other jurisdiction Forge, cause the forgery of, or knowingly use or submit any forged insurance document Improperly use any reference material or device to complete a licensing exam Knowingly accept insurance business from someone who is not licensed, but should be Fail to pay federal, state, or local income/sales tax, or Worker's Compensation premiums Take an application or a premium when the agent has not been appointed by the insurer Have any professional license or FINRA registration suspended or revoked Cause or let a client name you/your relative as beneficiary, unless insurable interest exists Fail to appear for a scheduled interview with the Superintendent Place coverage with an insurer other than the one the applicant chose, without consent For business entities, fail to report an individual licensee's violation Misrepresent or falsely claim an unearned qualification, status, or professional designation Obtain a premium loan in an insured's name without consent and written authorization After an appointment has been terminated, use any of an insurer's materials (letterhead, software, etc.) to give the false impression that you are still an agent of that insurer Fail to fulfill a refund obligation to a policyholder or applicant in a timely manner Use a license primarily for controlled business Conduct any insurance transaction without proper licensure/authorization/appointment Solicit, take an application for, or place any policy when not authorized to do so Solicit, market, or sell any product or service similar to insurance without fully disclosing to the buyer that it is not insurance and is not regulated by the Superintendent For Class A offenses, the Superintendent can order: A fine of up to $25,000 per violation Payment of costs and expenses incurred by the Department in the investigation and action Suspension of all the person's licenses for all lines Permanent revocation of all of the person's licenses for all lines Refusal to issue or refusal to renew a license The violator be banned from employment or investment in the insurance industry, for any period of time up to and including indefinitely Corrective actions in lieu of or in addition to these That the licensee be allowed to surrender for cause

If an agent deliberately includes false information in company records in order to deceive Department of Insurance examiners, he or she has committed a ________________ violation.

False Information and Advertising

Unfair Claim Settlement Practices

The insurer has 15 working days to acknowledge the receipt of a first-party claim, provide necessary claim forms, and reply to all other pertinent communications from the claimant. Insurers have 21 days to respond to Department of Insurance requests for claim information. In addition, all of the following acts are considered unfair or improper settlement practices in Ohio: Denying a claim outright, solely on the basis of the claim being submitted at all Failing to keep closed claim data for at least 3 years, or until the next financial examination Misrepresenting pertinent facts or policy provisions Denying a claim without referencing a specific provision, condition, or exclusion as grounds Failing to, within 21 days of receiving proof of loss, either accept or deny a claim, or else notify the claimant that more time is needed to investigate. Thereafter, claimants must be notified at least every 45 calendar days of the investigation's status. Forcing insureds to sue by offering less than the amount due Failing to implement standards for the prompt investigation and settlement of claims Not making good faith effort for prompt and fair settlement where liability is reasonably clear Trying to settle a claim for less than a reasonable person would believe themselves entitled based on the insurer's advertising material Attempting to settle claims on the basis of an altered application Threatening to appeal or making known a policy of appealing arbitration awards in order to intimidate or influence claimants/insureds to accept less than they are entitled to Delaying investigation or claim payment by requiring resubmission of the same information, for example: requiring a preliminary claim report and later requiring a formal proof of loss Not settling a valid claim under one portion of the policy in order to influence settlements under other portions of the policy Failing to pay an agreed-upon settlement amount within 5 working days of agreement Reducing a claim amount without itemizing such reductions on the written estimate The following ARE NOT unfair claim settlement practices: Failing to pay a claim prior to receiving a proof of loss Failing to pay a claim for services received prior to the coverage effective date Failing to pay a claim when a policy is in a lapsed status Settling a claim by arbitration. Misrepresentation of Policy Provisions Insurers and agents must fully disclose all relevant benefits, coverages or other provisions to claimants, and cannot willfully conceal such information, nor can they: Deny a claim due to the claimant's failure to make the property available for inspection, unless the policy specifically states such failure is a breach Deny a claim based on the claimant's failure to give written notice of loss within a specified time limit, UNLESS:The policy specifically states notice is required within the time limit; ORThe failure to notify is so unreasonable as to breach the duty to cooperate with the insurer Indicate to a claimant on a payment check or in an accompanying letter that such payment is final or constitutes a release of the insurer from liability, UNLESS:The policy limit has been paid; ORThe claimant and the insurer have agreed to a compromise settlement The claimant has 60 days to submit a proof of loss to the insurer. Service of Legal Process A nonadmitted foreign/alien insurer who transacts insurance in Ohio (such as soliciting applications, issuing contracts, or collecting premiums) is deemed to have appointed the Superintendent as attorney, meaning the Superintendent can accept service of legal process on behalf of the insurer. The very act of doing any Ohio insurance business constitutes the insurer's agreement.

Company Regulation

Certificate of Authority Insurance companies cannot transact any insurance business without a valid Certificate of Authority. This Certificate gives the insurer the authority to issue policies. The Superintendent will issue a Certificate of Authority to an insurer that has: Deposited the required amount of securities Filed a duly certified copy of its Articles of Incorporation Filed a copy of the Attorney General's approval Filed a copy of its bylaws or constitution Certificates are filed with the county recorder and must be kept at least 2 years after the filing date. Foreign or alien companies admitted to transact fidelity or surety insurance must also deposit $50,000 in United States bonds with the Superintendent. Certificates of Authority must be renewed annually (every year), and renewal is contingent upon providing an annual statement audit to the Superintendent demonstrating the insurer's solvency.

Unfair Trade Practices in Insurance

Each of the following acts is a 4th degree misdemeanor. Agents are justified in disobeying an insurer's instructions to commit any illegal act. Rebating/Illegal Inducements It is illegal to offer any rebate, credit, or premium discount not specifically written into the policy. However, the following legal acts are NOT considered rebating, and are allowed: Readjusting group policy premiums based on actuarial data Reducing industrial life premiums to reflect a decrease in the insurer's collection expenses Paying earned dividends to policyholders It is illegal to give or offer anything of value not specifically written into the policy to try to induce someone to buy insurance. However, a promotional item or a meal is allowable, IF it is: Less than $50 in value Offered for getting a quote or general information, and no insurance purchase is required Premium Refunds and Other Incentives It is illegal to fail to fulfill a refund obligation in a timely manner. Refund time limits are as follows: 30 days after the date the client takes/requests action prompting a refund If the agent is meant to issue part of the refund, 30 days after the date of the insurer's check 45 days after the date of the agent's statement of account on which the refund first appears False Information and Advertising It is illegal to place before the public any untrue, deceptive, or misleading information, such as in advertising, or before state regulators. Entering false information or omitting true information in any report or record with the intent to deceive an official is a False Information and Advertising violation.

Insurance Fraud Regulation

Insurance fraud is the intentional concealment of information, or the giving of false information to obtain coverage, a favorable rating, or undue claim payment. It is considered insurance fraud to: Transfer or conceal any property in order to avoid unfavorable claim settlements Conceal, destroy, mutilate, alter, or falsify any record of an insurer's property Withhold from a receiver, trustee, or court officer any record relating to an insurer's property Give or receive anything of value for acting or attempting to act in any judicial proceeding, if the act or omission contributes to the impairment or insolvency of any insurer Aid or abet another person in committing any of these acts Each insurer must have an antifraud program in the form of a written plan. This plan must identify the person or persons responsible for the program, and include specific procedures for when fraud or suspected fraud is brought to its attention. This written plan is required within 90 days after obtaining an Ohio license or beginning to transact insurance in Ohio. The written plan must remain current, and must be modified if procedures or persons responsible change. Insurance fraud is a 1st-degree misdemeanor if the amount of the fraudulent claim is under $1,000. If the amount of the fraudulent claim is: Between $1,000 and $7,500, the fraud is a 5th-degree felony Between $7,500 - $150,000, the fraud is a 4th-degree felony $150,000 or more, the fraud is a 3rd-degree felony It's illegal to give a deceptive statement to an insurer or knowingly help another person to do so. A person who provides truthful information about another's fraudulent practices will be immune from civil action. Unless acting fraudulently, or with malice, or in bad faith, no one can be held liable for damages for filing a report or exchanging information about suspected insurance fraud with: Law enforcement employees or officials Employees/officials of the Department of Insurance, the Insurance Fraud Bureau, or the NAIC Any other persons involved in the detection or prevention of insurance fraud Any insurance fraud investigatory evidence in the possession of the Superintendent is considered a confidential law enforcement record, and cannot be subpoenaed in civil action by any Ohio court. Notice of Warning All applications and claim forms must clearly contain a warning substantially as follows: "Any person who, with intent to defraud or knowing that he is facilitating a fraud against an insurer, submits an application or files a claim containing a false or deceptive statement is guilty of insurance fraud." Fraud Notification An insurer must notify the Department if it reasonably believes a person is perpetrating insurance fraud. No notification is required if the suspected fraud concerns claims less than $1,000.

Policy Forms/Rates/Exceptions

Insurers must file both of the following with the Superintendent: Every form used for every policy, endorsement, and rider that it writes or plans to write Every rating rule, including every rating manual, minimum class rate, rating schedule/plan, and every modification of them, that it uses or plans to use Every filing must include: Proposed effective date (when the insurer plans to begin using the form or rating) Type and extent of coverage Information supporting the filing, such as the experience of insurers or rating bureaus, statistical data/interpretation, and other relevant factors This includes specific inland marine rates made by a rating bureau on specially-rated risks. Insurers have the option to meet these obligations by subscribing as a member of a licensed rating bureau and authorizing the Superintendent to accept the bureau's filings on behalf of the insurer. Specific inland marine rates made by rating bureaus on specially-rated risks become effective when filed. All other filings have a 30-day waiting period before they become effective. The Superintendent can allow an approved filing to take effect before the end of the waiting period upon written request. A filing is considered approved if the Superintendent does not reject it by the end of the waiting period. If a filing does not include supporting information or the Superintendent cannot sufficiently determine whether the filing is appropriate, the Superintendent can require the filer provide such information, and the waiting period will not start until it is received. A rate that exceeds the amount provided by a filing can be used on a specific risk, if the insured makes written application to the Superintendent explaining the reasons, and the Superintendent approves. Every policy an insurer issues must be in accordance with the filings they have in effect. The only exception is specific inland marine coverage not written according to rating plans. Filings and supporting information shall be open to public inspection after the filing becomes effective. Superintendent's Authority The Superintendent can suspend or modify filing requirements by written order, without prior notice or a hearing. Insurers and rating bureaus affected by such an order will be informed. Note When market competition is too low, excessive rates may result, which is unfair to consumers. Too-high levels of market competition can produce inadequate rates, which can lead to insurer insolvency. If necessary to maintaining optimal levels of market competition, the Superintendent has the authority to: Require review of each filing that increases or decreases rates for commercial casualty or liability Require a 30-day waiting period before such filings can become effective Order a one-time extension of this waiting period, up to 15 days Any rule the Superintendent makes to this effect expires 1 year later, unless extended or rescinded.

Disciplinary Actions

License Denial, Probation, Surrender, Suspension, Revocation, or Refusal to Issue or Renew The Superintendent may suspend, revoke, or refuse to renew a license if the licensee: Provides false, misleading, or materially untrue information on a licensing application Fails to submit a client's insurance application within 7 days after accepting a premium Knowingly misrepresents the terms and benefits of any actual or proposed insurance contract Is convicted of, or pleads guilty or no contest to any felony whatsoever Is convicted of, or pleads guilty or no contest to a misdemeanor that specifically involved:Misuse or theft of money or propertyFraud, forgery, dishonest acts, or breach of a fiduciary dutyMoral turpitude Has any insurance license denied, suspended, or revoked in any other jurisdiction Cheats on a licensing exam Forges or causes the forgery of any document used in an insurance transaction Fails to provide written response within 21 calendar days of receiving a written inquiry from the Department (unless an extension has been requested and granted) Commits any unfair trade act or business practice Demonstrates incompetence, untrustworthiness, or financial irresponsibility Fails to pay federal, state, or local income taxes Has a scheduled interview to answer questions before the Superintendent, and fails to appear Knowingly aids or abets another in violating any insurance law or rule If a nonresident agent, fails to maintain licensure in their home state for lines held in Ohio. The Superintendent's authority is not limited to license suspension/denial/revocation/refusal. If the Superintendent finds one of the above violations has occurred, they also have the authority to: Require payment of a civil penalty of up to $25,000 per violation Require payment of costs incurred by the Department in the matter Suspend all the violator's licenses for a certain period, or an indefinite period, or permanently Permanently revoke all of the violator's licenses for all lines of insurance Prohibit the violator from being employed or invested in the business of insurance in Ohio Allow the licensee to 'surrender for cause,' which avoids a revocation or suspension, but prohibits the licensee from seeking any insurance license for a minimum of 5 years Before denial/suspension/revocation/refusal of a license, or any other penalty, the Superintendent must give the licensee the opportunity for a hearing. A licensee has the right to appeal disciplinary action and receive a hearing before the Court of Common Pleas in Franklin County by submitting a notice of appeal within 15 days of the action.

Inactivity Due to Military Service or Extenuating Circumstances

Licensees who, because of military service, long-term medical disability, or other extenuating circumstance, are both unable to comply with renewal procedures and unable to engage in insurance business, can request a renewal date extension. Requests must be made in writing, and the Superintendent can refuse to consider requests submitted after the license's renewal date.

Qualifications For Licensing (continued)

Licenses are issued for the following lines of authority: Major Lines Life - Coverage on human lives, including endowments and annuities, and disability benefits Accident & Health - Sickness, bodily injury, accidental death, can include disability benefits Property - Coverage for direct or consequential loss or damage to real or personal property Casualty - Covers liability for death, injury, personal injury, disability, and property damage Variable Life & Variable Annuity - Coverage provided by variable life or annuity products Personal Lines - Noncommercial property/casualty coverage for individuals and families Limited Lines Surety Bail Bonds Title Insurance Other limited lines, including: Credit, Rental, Crop, etc. Surplus Lines Broker Applicant must be a United States resident licensed for both Property and Casualty lines, and must post a $25,000 penal bond. The license expires January 31st of the year after it was issued. Before soliciting from a nonadmitted carrier, due diligence requires that the broker contact 5 authorized insurers (or at least as many as the broker is appointed to). If coverage cannot be secured with an admitted insurer within 10 days, the risk may be placed with an unauthorized insurer. Note Surplus lines brokers obtain coverage (other than life insurance) on Ohio property or for Ohio residents from nonadmitted carriers (insurers not authorized to transact business in Ohio). License Surrender Licensees in good standing who no longer want to maintain a license may surrender it by written request. The request must be received by the Department before the license's renewal date in order to be considered. Agents cannot surrender a license while under investigation by the Superintendent. After a license has been surrendered, the former licensee must apply as a new agent in order to be licensed again. Inactive Status An individual agent may petition the Superintendent for inactive status, provided the agent is no longer engaged in insurance in any capacity requiring a license, and has no intent to engage in any such activity for at least 24 months. Business entities are not eligible for inactive status. The agent must be in good standing and in current compliance with CE (continuing education) requirements. Persons granted inactive status are exempt from CE requirements.

Insurance Regulation

Licensing The licensing process protects the public interest by ensuring that licensees are competent and qualified to hold an insurance license and are held accountable for their actions. A license is required in order to solicit, negotiate, or transact insurance business in any way, including but not limited to taking applications, quoting premiums, discussing coverage, writing/delivering/renewing policies, and issuing binders. Maintenance and Duration Qualifications For Licensing The Superintendent will issue a resident agent license to: An individual applicant who is an Ohio resident and who:Is at least 18 years of age, a U.S. citizen, or legally authorized to work in the United StatesIs of good reputation and character, trustworthy and otherwise suitable to be licensedHas not done anything to warrant denial, revocation, or suspension of the licenseHas passed a criminal background check and submitted a full set of fingerprintsHas fulfilled prelicensing education and exam requirements for each line applied for A business entity that is either domiciled in or has its main office in Ohio, and that:Has designated a licensed individual agent to be responsible for its complianceHas not done anything to warrant denial, revocation, or suspension of the license Licenses must include the following information: The licensee's name, license number, issue date, and expiration date The lines of authority granted Any other information the Superintendent requires Note Applicants for a Variable Products license must be registered with FINRA (the Financial Industry Regulatory Authority) and have passed any required FINRA exams.

Misrepresentation

Misrepresentation specifically refers to dealings or communication with consumers. It is illegal to make fraudulent comparisons of policies, misrepresent the terms or benefits of a policy, or make false or misleading representations about the financial condition of any insurer. This includes: Misrepresenting funds actually available for claims, or capital not actually paid up in cash Presenting a financial standing that differs from the findings of its last financial examination Intentionally misstating the cost of any financed policy Misrepresenting a life insurance policy as shares of stock Misrepresenting endowment proceeds as anything other than paid-for benefits Misrepresenting a life policy or annuity as a contract for purchasing funeral goods or services Defamation of Insurer It is illegal to make any false or malicious oral/written statement intended to injure a person or entity in the insurance business. For example, a false statement about an insurer's financial condition. Unfair Discrimination Permitting individuals of the same class and hazard to be charged different rates for the same coverage is unfair discrimination. Rate differentials are only allowable if based upon sound actuarial principles or related to actual experience. Other examples of unfair discrimination are: Cancelling, declining, or refusing to renew an insurance policy based on sex or marital status Making any distinction on the basis of race as to premiums or rates charged

Insolvency

Most insurers, including all stock insurance companies, are determined to be insolvent when: They are unable to pay their obligations when due; OR Their assets are less than their liabilities plus the greater of either:Any capital/surplus required by lawThe total stated value of their capital stock The insolvency standard is slightly different for insurers that only issue assessable policies, such as mutual insurance companies. These insurers are declared insolvent if they are unable to pay any obligation within 30 days of either the due date or the date specified in the first assessment.

Resident/Nonresident Licensees

Nonresidents of Ohio who are currently licensed in good standing in their home state may be issued an Ohio nonresident license without taking the exam, if: Their home state grants nonresident licenses to Ohio residents on a reciprocal basis They are currently licensed in their home state for the lines of authority requested They submit a copy of their home state license application, or a uniform application They pay required fees and meet Ohio requirements regarding reputation and character Nonresident business entities must: Submit a nonresident business entity application Be authorized to do business in Ohio Designate a licensed individual agent to be responsible for compliance If their home state does not issue nonresident licenses on a reciprocal basis, nonresidents must meet the requirements for an Ohio resident agent's license. The Superintendent may use the NAIC's producer database to verify an applicant's status in another state and may require a certification letter from the applicant's home state. Nonresident licensees must notify the Department within 30 days of any change in their resident license status. The Superintendent can revoke the license of a nonresident licensee who fails to maintain a resident license in their home state.

License Renewal/Nonrenewal

The Department of Insurance requires that individual agents, both resident and nonresident, renew their license biennially (every 2 years) by the last day of their birth month. In order to be renewed, the license holder must: Complete a renewal application Have fulfilled CE credit requirements prior to submitting the renewal application Have not committed any act that is grounds for suspension, revocation, or refusal Pay any required renewal feesStanding $25 renewal fee for Limited Line and nonresident agentsThis fee is waived for all Ohio resident agents who have a CE hours requirement The first license expiration date can't be less than 18 months or more than 29 months from the date of initial licensure. After the initial license renewal, the ongoing expiration date for individual resident/nonresident licenses is the last day of the agent's birth month every 2 years thereafter. The renewal date for resident business entities is the last day of September every even-numbered year. Nonresident business entities must renew by the last day of September in odd-numbered years. Licensees (both individual and business entity) that fail to apply for renewal on or before the appropriate renewal date may submit a late renewal application with all required fees. Late renewals must be submitted before the first day of the second month after the license renewal date. Late renewals require an additional $50 fee in addition to any renewal application fee The late renewal period ends on the first day of the second month following the renewal date, at which time an unrenewed license is automatically suspended for nonrenewal. An agent with a suspended license cannot sell, solicit, or negotiate insurance in Ohio. A licensee has 12 months from the date the license ought to have been renewed to apply for reinstatement. Reinstatement requires an additional $100 fee in addition to any renewal application fee If the license is not reinstated by the end of this 12 month period, it is cancelled. (If the licensee is under Department investigation, the license will not be cancelled until the end of the investigation.)

Examination of Books and Records

The Superintendent can conduct a financial examination of an insurer at any time. Ohio law requires every domestic insurer to be examined at least once every 3 years. The Superintendent can defer the examination, but only as long as no insurer goes more than 5 years without examination. The Superintendent can require examination before admitting an insurer or issuing any license. All examination fees and expenses must be paid by the company being examined. Any examiner appointed by the Superintendent has all the Superintendent's power and authority to examine. Insurers under examination must allow free access to all records including those kept by the company's agents. If any records appear to be inadequate for the examination, the insurer may be required to employ experts to rewrite or balance any such records. The Superintendent can summon or subpoena witnesses to testify on any insurance matter, can require the production of any relevant record or document, and can examine insurance company officers, agents, and employees under oath. Refusal to submit to an examination is grounds for suspension, refusal, or nonrenewal of any license or Certificate of Authority. The insurer has 30 days after the mailing date of the examiner's report to file any written objections with the Superintendent.

Superintendent's (Director's) General Duties and Powers

The Superintendent is the chief executive officer and director of the Ohio Department of Insurance. The Superintendent cannot make laws, but is responsible for seeing that insurance laws are executed and enforced. The Superintendent does not set rates, but is responsible for making sure rates are adequate, and not excessive or unfairly discriminatory. The Superintendent has the power to take testimony under oath regarding alleged violations, but not the power to arrest or criminally charge a person. If the Superintendent decides that there is sufficient evidence for criminal prosecution, they can provide information to the Ohio authorities in order to have the person suspected of a violation arrested and charged. The Superintendent may do all of the following: Establish procedures for issuing, renewing, reactivating, and reinstating insurance licenses Set fees for license extensions, renewals, reinstatements, and reactivations Contract with nongovernmental entities like the NAIC to administer licensing functions The Superintendent has the authority and duty to: Aid in the interpretation of any state insurance law Investigate insurance law violations in Ohio, including consumer complaints Initiate criminal proceedings through the prosecuting attorney of any county Regulate the internal affairs of the Department of Insurance File and keep all books and papers as required by law Administer oaths, hold hearings, subpoena witnesses and documents for testimony Levy fees to defray operating costs

Policy/Application Signature

The Superintendent may, in addition to license suspension/revocation/refusal, assess a civil penalty or impose any other permitted sanction upon a licensee who forges or causes the forgery of an insurance application, or any other document used in an insurance transaction.

Reporting of Felony and Crimes of Moral Turpitude

The Superintendent may, in addition to license suspension/revocation/refusal, assess a civil penalty or impose any other permitted sanction upon a licensee who: Pleads guilty/no contest to, or is convicted of, any felony charge Pleads guilty/no contest to, or is convicted of, a misdemeanor that involves any of these:Theft/misuse of money or property, fraud, forgery, dishonest acts, breach of fiduciary dutyAn act or omission related to the business of insurance, securities, or financial servicesMoral turpitude In the event of a guilty/no content plea, the Superintendent can take action regardless of whether a judgment has been entered by the court.

Financial Requirements

The Superintendent requires insurers file an annual audit of their financial statements, prepared by independent certified public accountants. The Superintendent uses this audit to determine whether an insurer's continued operation might be hazardous to their policyholders, creditors, or the general public, using standards including: Adverse findings in statutory audit reports, actuarial opinions, reports or summaries The NAIC's financial analysis solvency tools and reports Comparing an insurer's contracted obligations and related expenses to the insurer's assets Insurers with fewer than 1,000 policyholders and less than $1 million in total written premiums at the end of any year are exempt from filing the statement audit for that year, although the Superintendent can deny this exemption. An insurer cannot be incorporated in Ohio until the Superintendent verifies to the Secretary of State that the insurer has put in escrow $100,000 in paid-in capital and $150,000 in contributed surplus. A foreign or alien fidelity guaranty company cannot be licensed to transact business in Ohio unless it has deposited at least $200,000 of its assets as securities.

Federal Do Not Call Registry

The Telephone Consumer Protection Act (TCPA) makes it illegal for most telemarketers or sellers to call a number listed on the National Do Not Call Registry. Companies are required to search the registry at least once every 31 days and to drop from their call lists the number of any customer who has registered. The TCPA also limits the hours during which a telemarketer may call a noncustomer at home to between 8 am and 9 pm, and requires all telephone solicitors to provide their own name, the name of the company or entity they represent, and a contact phone number or address for that entity.