WASHINGTON STATE INSURANCE
What are his broad Powers?
1) Responsible for examining insureres 2) issueing licenses 3) regulatings to help carry out provisions of the WA insurance code
How long can a suspension be?
An order that suspends a producer's license must specify the period during which the suspension will be effective. The period may not be longer than 12 months.
COME BACK TO SLIDE 17 AND 18
COME BACK TO SLIDE 17 AND 18
What happens if the records aren't up to snuff?
If the Commissioner finds the accounts to be inadequate, or improperly kept or posted, he or she may employ experts to rewrite, post or balance them at the expense of the person being examined.
NEW SECTION LICENSES:
NEW SECTION LICENSES:
Unfair Claim Settlement Practices:
Unfair Claim Settlement Practices:
A surplus lines broker is
a person licensed to place coverage that is not available in Washington through insurers that are not licensed in Washington.
Do you have to have a license to investigate and report on claims?
An insurance producer or title insurance agent may act as an adjuster and may investigate and report upon claims without an adjuster license. No license is required of a nonresident independent adjuster adjusting a single loss or adjusting losses arising out of a catastrophe common to all such losses.
The following are exempt from the examination requirement:
Applicants for limited lines and specialty lines licenses Applicants for a nonresident adjuster's license who are licensed in another state and are deemed by the Commissioner to be fully qualified and competent Applicants for an adjuster's license who have worked for a year (part of which was in the year prior to the date of application) adjusting, investigating, or reporting insurance claims Applicants for a nonresident crop adjuster's licenses who are licensed in another state, have completed a prelicensing course, and have passed a licensing exam in another state
Can these reports and examinations be reviewed by the public?
Yes. - Public insurance records must be indexed and available for public inspection and copying during normal business hours. -Requests for public records must be made to the public records officer in the Commissioner's office. -Anyone whose request to review public documents is denied may petition for a prompt review of the decision
The Commissioner may temporarily suspend a license by an order served by mail or by personal service upon the licensee not less than three days prior to the effective date, provided the order contains a notice of revocation and includes a finding that the public safety or welfare imperatively requires emergency action.
The Commissioner may temporarily suspend a license by an order served by mail or by personal service upon the licensee not less than three days prior to the effective date, provided the order contains a notice of revocation and includes a finding that the public safety or welfare imperatively requires emergency action.
If there is cause to believe that anyone is violating the insurance code or any regulation or order made by the Commissioner, the Commissioner may:
issue a cease and desist order; bring an action in court to stop the person from continuing the violation; or both.
The Commissioner may limit
the authority of a temporary license, revoke the license, or require supervision of the licensee, to protect insureds and the public. A temporary license may not continue after the business is disposed or concluded.
What must he do before taking officer?
Execute a bond of $25000 payable to state
Can the commissioner appoint more commisioners amd staff?
The Commissioner may appoint a Chief Deputy Commissioner, who has the power to perform any act or duty conferred upon the Commissioner. The Commissioner may also appoint additional Deputy Commissioners.The Commissioner is responsible for the official acts of deputies and may revoke a deputy's appointment. The Commissioner may employ examiners, as well as actuarial, technical, and administrative assistants as needed.
Can the commisioner accept an examination report on a foriegn or allien insurer licensed in Washington?
Yes. As long as prepared by the accredited insurance department for the company's state of domicile.
The designated responsible licensed person (DRLP) must be must be
given the necessary authority and information by the business entity that reasonably assures that the DRLP can cause or influence the entity's compliance with all applicable insurance laws or rules, or both of this state.
A first-party claimant
includes individuals, corporations, or other legal entities that have a right to payment under an insurance policy or contract because of the occurrence of a contingency or loss covered by the policy.
A third-party claimant
is an individual, corporation, or other legal entity asserting a claim against any individual, corporation, or other legal entity insured under an insurance policy.
The surplus lines broker must set forth in an affidavit that:
the insurance is not available from a majority of the authorized insurers; and coverage is not being procured from an unauthorized insurer to obtain a lower premium or other competitive advantage
In addition, the Commissioner may examine the records, accounts, documents, and transactions of:
- any agent, solicitor, broker, or adjuster licensed in Washington; -anyone who has the exclusive or dominant right to manage or control a stock or mutual insurer; -anyone holding shares of capital stock of a domestic insurer to control its management as a voting trustee or otherwise; -and anyone engaged in the formation of a domestic insurer, insurance holding corporation, or a stock corporation to finance a domestic insurer or the production of its business, or a corporation to be attorney-in-fact for a domestic reciprocal insurer.
When must the commisioner examine?
- each insurer holding a certificate of authority at least once every five years; - any managing general agent, if necessary, for the company exam; and - each rating organization and examining bureau licensed in Washington at least once every five years or as often as necessary.
An agent, broker, insurer, or solicitor may not, as an inducement to buy insurance or a rebate after the purchase, offer anything of value not specified in the policy. All of the following would be considered a rebate
: Premium rebate or discount Shares of stock or other securities Any special advisory board contract or other agreement promising profits, special returns, or special dividends Prizes or promotional items worth more than $100 per person in a 12-month period Anything else of value not provided for in the policy This does not apply to commissions paid to agents, brokers, or solicitors for insurance placed on their own risk.
How much can you be penalized?
After a hearing, and in addition to or instead of the suspension, revocation, or refusal to renew a license, a producer may be fined not more than $1,000 per offense. The licensee must pay the fine between 15 and 30 days after the date of the order. If the fine is not paid when due, the Commissioner will revoke the license if it has not already been revoked. The fine may be recovered in a civil action brought on behalf of the Commissioner by the attorney general.
Anyone who knowingly acts as an insurance agent, broker, solicitor, or adjuster without being properly licensed is guilty of a
Class B felony. This criminal penalty is in addition to any other civil or administrative penalty.
Who is responsible for providing the commisioner with records during an examination.
Every person, its officers, employees, and representatives must produce the accounts, records, documents, and files in his or her possession or control relating to the subject of the examination and make them accessible to the Commissioner.
If the Commissioner believes a person is unlawfully acting without a license, the Commissioner may take any or all of the following actions:
Issue and enforce a cease and desist order Suspend or revoke a license After notice and an opportunity for a hearing, assess a civil penalty of up to $25,000 for each violation
NEW SECTION MARKETING PRACTICES:
NEW SECTION MARKETING PRACTICES:
NEW SECTION: Producer Compensation Disclosure
NEW SECTION: Producer Compensation Disclosure
What are the exceptions to the request for these reports?
Requestors should be aware of the following exemptions: -Medical malpractice—closed claim reports -Confidentiality of documents, materials, or other information - Insurer's risk-based capital reports -Insurance fraud - Documents, materials, or information about insurer's transactions with affiliates - Documents, materials, or other information in the possession or control of the Commissioner that are obtained by or disclosed in the course of an examination or investigation -Material acquisitions or disposition information -Service contract provider's annual reports -Statistical summaries -The OIC is prohibited by statute from disclosing lists of individuals for commercial purposes.
How is he elected?
Same way as other state officials
When does he take office?
Serves for four yerars. Starts wed after the second monday of January
To obtain coverage from an unauthorized insurer, the following conditions must be met.
The insurance must be procured through a licensed surplus lines broker. The insurance must not be available, after diligent effort, from among a majority of the insurers authorized to transact that kind of insurance in Washington. Coverage may not be procured from an unauthorized insurer to obtain a lower premium or other competitive advantage.
Policy premiums and rate changes must be filed and approved by commisioner except for?
These requirements do not apply to: life insurance; disability insurance; reinsurance (except joint reinsurance); insurance against loss of or damage to aircraft, their hulls, accessories, and equipment or against liability (other than workers' compensation and employer's liability arising out of the ownership, maintenance, or use of aircraft); insurance of vessels or craft, their cargoes, marine builders' risks, marine protection, and indemnity ; and title insurance
True or False: A resident business entity acting as an insurance producer is required to obtain an insurance producer license?
True. Application must be made using the uniform business entity application, and the individual signing the application must declare under penalty of refusal, suspension, or revocation of the license that the statements made in the application are true
How are actions prosecuted?
When requested by the Commissioner, the state's attorney general and prosecuting attorneys throughout Washington prosecute or defend all proceedings brought under the code.
Does the commisioner produce tables and conntent?
Yes. The Commissioner is also responsible for obtaining and publishing life expectancy tables, annuity values, and values of life and term estates. The Commissioner must help consumers obtain information about insurance products and resolve complaints involving insurers and other licensees.
To qualify for a certificate of authority, an insurer must:
be a stock, mutual, or reciprocal insurer of the same general type as may be formed as a domestic insurer; have sufficient capital funds as required by the insurance code; and transact insurance authorized by its charter and the insurance code.
No insurance which covers prescription drugs may exclude coverage of a drug for a particular use on the grounds that the drug has not been approved by the Food and Drug Administration (FDA) for that use, if that drug is recognized as effective for that treatment:
in a standard reference compendia; in the majority of relevant peer-reviewed medical literature; or by the Federal Secretary of Health and Human Services. This regulation does not require coverage for any drug when the Food and Drug Administration has determined its use to be contraindicated or for experimental drugs not approved for any use by the Food and Drug Administration.
A mutual insurer is an
incorporated entity without stock that is owned by its policyowners. A mutual insurer may pay insurance dividends to its policyowners out of surplus. With respect to the management, records, and affairs of a mutual insurer, a member (policyowner) has the same character of rights and relationship as a stockholder has toward a domestic stock insurer.
An insurer is anyone in the business of making
insurance contracts other than a fraternal benefit society.
A fraternal benefit society: i
is a nonprofit incorporated society, order, or supreme lodge that does not have capital stock; is organized solely for the benefit of its members; operates on a lodge system; has a representative form of government ; and provides for the payment of insurance benefits for its members or beneficiaries.
It is illegal to misrepresent the terms, benefits, advantages, dividends, or share of the surplus of a policy or to use a name or title of a policy or class of policies that misrepresents their nature. Anyone who knowingly makes a false or misleading statement or impersonation or who willingly fails to reveal a material fact relative to an insurance application is guilty of a
misdemeanor and may have his license revoked.
Every certificate of authority must state the:
name of the insurer; location of its principal office; name and location of the principal office of its attorney-in-fact if a reciprocal insurer; and kind(s) of insurance it is authorized to transact in the state.
Nonresident producer licenses will be issued for the line
of authority that is substantially equivalent to the line of authority granted in the home state. A nonresident producer who moves from one state to another state or a resident producer who moves from this state to another state must file a change of address and provide certification from the new resident state within 30 days.
An advertisement cannot use the existence of the Washington Insurance Guaranty Association or the Washington Life and Disability Insurance Guaranty Association to
promote sales, to solicit, or to induce the purchase of any insurance that is covered by either guaranty association.
If a business entity or its authorized representative terminates the affiliation of an insurance producer for cause, the Commissioner must
receive notice of that termination by electronic submission within 30 days following the effective date of the termination. Upon request, additional information, documents, records, or other data pertaining to the forcause termination must be provided promptly to the Commissione
The Commissioner may put a licensee on probation, and require the licensee to:
report regularly to the Commissioner on matters that are the basis of the probation; limit practice to an area prescribed by the Commissioner; or continue or renew continuing education until the licensee attains a degree of skill satisfactory to the Commissioner in the area that is the basis of the probation.
At any time during a probation term where the licensee has violated the probation order, the Commissioner may:
rescind the probation and enforce the Commissioner's original order; and impose any disciplinary action permitted, in addition to or in lieu of enforcing the original order.
Each appointment or affiliation is effective until:
the insurance producer's license is revoked, terminated, or nonrenewed; the appointment or affiliation renewal fee is not paid; or written notice of termination is received by the Commissioner.
Can the commisioner examine records whenever he or she pleases?
Yes. The Commissioner may examine the transactions, accounts, records, documents, and assets of each authorized insurer as often as considered necessary
In general, an insurer may not transact insurance in Washington unless the Commissioner grants it a
certificate of authority, which is its authorization to sell insurance in the state (unless a surplus lines insurer).
Insurers that have long-term care insurance policies approved for sale in this state must certify annually that all of its insurance producers engaged in the sale, solicitation or negotiation of long-term care insurance coverage in this state have:
completed the required eight-hour, one-time long-term care education and training course prior to selling, soliciting, or negotiating the company's longterm care insurance coverage in this state; and if due, completed the required four-hour long-term care continuing education requirement.
Insurance producer means a
person required to be licensed under the laws of this state to sell, solicit, or negotiate insurance.
The Commissioner may place on probation, suspend, revoke, or refuse to issue or renew an adjuster's license, an insurance producer's license, a title insurance agent's license, or any surplus line broker's license, or may levy a civil penalty, for any one or more of the following:
1) Providing incorrect, misleading, incomplete, or materially untrue information in the license application 2) Violating any insurance laws, or violating any rule, subpoena, or order of the Commissioner or of another state's insurance Commissioner 3) 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 3) Intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance 4) Being convicted of a felony 5) Committing any insurance unfair trade practice or fraud 6)Using fraudulent, coercive, or dishonest practices, or demonstrating incompetence, untrustworthiness, or financial irresponsibility in this state or elsewhere 7)Having an insurance producer license, or its equivalent, denied, suspended, or revoked in any other state, province, district, or territory 8) Forging another's name to an application for insurance or to any document related to an insurance transaction 9)Cheating on an insurance licensing exam 10_ Knowingly accepting insurance business from a person who is required to be licensed but is not 11)Obtaining a loan from an insurance client that is not a financial institution and who is not related to the insurance producer
Rates and Forms used by insurance companies
All insurance policy forms, applications, riders, or endorsements must be filed with and approved by the Commissioner before they can be used. Filings should contain a certification that the policy form complies with state insurance regulations. If not, certification must be made at least 30 days before the form is used. After 30 days, the form is deemed approved unless the Commissioner has specifically disapproved it or extended the approval period for another 15 days. If the policy form is disapproved, the Commissioner must state the reasons for the disapproval.
Excemptioms to License
An insurer An officer, director, or employee of an insurer or insurance producer, provided the person does not receive commission and the person's activities are executive, administrative, managerial, or clerical and are only indirectly related to the sale, solicitation, or negotiation of insurance; or the person's job relates to underwriting, loss control, inspection, or claims, or providing technical advice and assistance to licensed insurance producers A person who secures and furnishes information for group life insurance, group property and casualty insurance, group annuities, group or blanket accident and disability insurance; or for the purpose of enrolling individuals; or for issuing certificates or administration where no commission is paid An employer or association or its officers, directors, employees, or the trustees of an employee trust plan, who administer/operate an employee benefit program as long as they are not in any manner compensated by the insurer issuing the contracts Employees of insurers or organizations employed by insurers who are engaging in the inspection, rating, or classification of risks, or in the supervision of the training of insurance producers, and who are not engaged in the sale, solicitation, or negotiation of insurance A person whose activities are limited to advertising through communication in printed publications or other forms of electronic mass media whose distribution is not limited to Washington residents, provided that the person does not sell, solicit, or negotiate insurance for Washington risks A nonresident who sells, solicits, or negotiates a contract of insurance for commercial property and casualty risks to an insured with risks in more than one state, provided that the person is licensed in the state where the insured maintains its principal place of business and the policy primarily insures risks located in that state A salaried, full-time employee who advises the employer about insurance interests, provided that the employee does not sell or solicit insurance or receive a commission Any person securing and forwarding information required for credit insurance, when no commission or other compensation is paid for securing and forwarding the information
It is an unfair method of competition and a deceptive act to knowingly make or publish any false, deceptive, or misleading representation or advertisement relative to the insurance business or to any person engaged in it. The following regulations are designed to ensure that insurers disclose necessary information to the public. =
Every advertisement must give the full name of the insurer and the location of its home or principal office, if any, in the United States (if the insurer is an alien insurer). Any party that is not an insurer cannot assume or use any name that deceptively infers or suggests that it is an insurer. An insurer's advertisement that purports to show the insurer's financial condition must substantively correspond with the insurer's last verified statement filed with the Commissioner. An insurer cannot advertise assets that it does not actually own or possess, and that are not available for payment of claims or losses, and that are held for the protection of its policyholders and creditors.
Additional Unfair Claim Settlement Practices
Insurers must complete their investigations of claims within 30 days after being notified of a claim, unless the investigation cannot reasonably be completed within that time. It is an unfair trade practice for an insurer to transact business in a name other than its legal name. It is an unfair or deceptive practice for an insurance company, insurance producer, surplus line broker, or title insurance agent to use quotations or evaluations from rating or advisory services or other independent sources in a manner likely to deceive the persons to whom the information is directed.
NEW SECTION: Term and Concepts
NEW SECTION: Term and Concepts
NEW SUB SECTION: Examination of Records
NEW SUB SECTION: Examination of Records
Commissioner has what authority?
The Commissioner has the authority to: conduct 1) investigations (including formal hearings) to determine whether any person has violated any provisions of the code; 2) conduct examinations, investigations, and hearings to efficiently administer the code; 3) take action against any insurance company, fraternal benefit society, health maintenance organization (HMO), or heathcare service contractor (HCSC) by revoking or suspending its Washington certificate of authority; 4) fine, revoke, or suspend the licenses of insurance agents, brokers, solicitors, or adjusters; 5) issue cease and desist orders; 6)and bring actions in court regarding violations of the insurance code.
Rules surrounding Surplus lines broker
The affidavit must be filed with the Commissioner within 60 days after the insurance transaction. An unauthorized insurer may not solicit insurance in Washington except as a surplus lines insurer. No one may represent an unauthorized insurer except as a surplus lines broker. Anyone who violates this law is subject to a fine of up to $25,000. The Commissioner may order the replacement of policies issued improperly by an unauthorized insurer. Violations may result in suspension or revocation of a license. An unauthorized foreign or alien insurer that solicits insurance in Washington submits itself to the jurisdiction of Washington courts in any action instituted on behalf of an insured, beneficiary, or the Commissioner. Other than a licensed surplus lines broker, anyone who makes an insurance contract in Washington on behalf of an unauthorized insurer without complying with the law is personally liable for the performance of the cont
Unless the agency agreement provides to the contrary, an insurance producer may receive compensation, such as:
a commission paid by the insurer; a fee paid by the insured; or a combination of commission paid by the insurer and a fee paid by the insured from which an insurance producer may offset or reimburse the insured for all or part of the fee.
No insured person may accept a rebate or commission if not entitled to one as a licensed agent, broker, or solicitor. If the insured has received or accepted a rebate or commission, the
amount of coverage will be reduced proportionally to the amount or value the rebate or commission bears to the premium for the insurance. In addition to the reduction, the insured will be fined up to $200
The Commissioner may revoke or refuse to renew any license immediately and without hearing for conviction of a felony if the facts demonstrate the licensee to be untrustworthy. The Commissioner may suspend, revoke, or refuse to renew the license by:
by an order served by mail or personal service not less than 15 days prior to the effective date, subject to the licensee's right to a hearing; or by an order on hearing effective not less than 10 days after the date of the service of the order, subject to the licensee's right to appeal to the superior court.
Any agent, solicitor, or other representative of an insurer who receives an insurance or annuity premium from an insured or applicant must deliver or mail a receipt for the policy as promptly as possible (generally by the next business day). The receipt must: be
dated; identify the producer and the producer's address; identify the insurer; identify the person for whom the payment is made; identify the contract or policy; and contain a brief description of the coverage for which payment is received.
Unfair methods of competition or deceptive practices in the business of insurance, specifically applicable to the settlement of claims, include Part 1
making claims payments to insureds or beneficiaries not accompanied by a statement setting forth the coverage under which the payments are being made; telling insureds or claimants that the insurer has a policy of appealing arbitration awards that are in favor of insureds or claimants to force the insureds to accept settlements less than the amount awarded in arbitration; delaying the investigation or payment of claims by requiring submission of duplicate forms; failing to settle claims promptly, where liability has become reasonably clear, under one portion of the insurance policy coverage to influence settlements under other portions of the policy; failing to explain promptly the basis in the insurance policy for the denial of a claim or for the offer of a compromise settlement; unfairly discriminating against claimants because they are represented by a public adjuster; failing to adopt and implement reasonable standards for the processing and payment of claims once the obligation to pay has been established (for example, payment, whether by check, draft, electronic funds transfer, prepaid card, or other method of electronic payment to the payee is expected within 15 business days); delaying appraisals or adding to their cost through the use of appraisers from outside the loss area; failing to make a good faith effort to settle a claim before exercising a contract right to an appraisal; and
Unfair methods of competition or deceptive practices in the business of insurance, specifically applicable to the settlement of claims, include Part 1
misrepresenting pertinent facts or insurance policy provisions; failing to acknowledge and act reasonably promptly on communications with respect to claims arising under insurance policies ; failing to adopt and implement reasonable standards for the prompt investigation of claims arising under insurance policies; refusing to pay claims without conducting a reasonable investigation; failing to affirm or deny coverage of claims within a reasonable time after proof of loss statements have been completed; not attempting in good faith to make prompt, fair, and equitable settlements of claims in which liability has become reasonably clear; compelling insureds to submit to litigation to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered in such actions; attempting to settle a claim for less than the amount to which a reasonable person would have believed he was entitled by reference to written or printed advertising material accompanying or made part of an application;
Unfair discrimination exists when two people
of equal risk are charged different rates solely because of a difference in gender, sexual orientation, or marital status or because of a sensory, mental, or physical handicap (except when a bona fide statistical difference in risk exposure has been substantiated). These rules, however, do not prohibit fair discrimination by a life insurer between individuals having unequal life expectancy.
Insurance is a contract in which
one party (the insurer) agrees, for a consideration (premiums), to pay (indemnify) the other (the insured) a specified amount upon determinable contingencies
n. Prior to selling, soliciting, or negotiating the sale of annuity products, all insurance producers must complete a
one-time, four-hour training course approved by the Commissioner and provided by an insurance education provider approved in this state. The annuity suitability training must include information on the following topics: the types of annuities and various classifications of annuities; identification of the parties to an annuity; how fixed, variable, and indexed annuity contract provisions affect consumers; the application of income taxation of qualified and nonqualified annuities; the primary uses of annuities; and appropriate sales practices, replacement, and disclosure requirements.
An insurance producer must become an appointed agent of
represented insurers. To appoint an insurance producer, the insurer must file a notice of appointment within 15 days from the date the agency contract is executed or when the first insurance application is submitted, whichever is earlier. Upon receipt of the notice of appointment, the Commissioner will verify electronically within 30 days, that the insurance producer is eligible for appointment. If the insurance producer is ineligible for appointment, the Commissioner will notify the insurer within 10 days
All individual residents licensed to transact life, disability, personal lines, property, casualty, or variable life and variable annuity lines of authority must
satisfy continuing insurance education (CE) requirements. (Resident adjusters and individuals holding only limited credit insurance, travel insurance, or surety licenses are exempt.)
Insurance transactions include:
solicitation; negotiations before the insurance contract is executed; execution of an insurance contract; transaction of matters after the contract has been executed; and insuring.
Before approving the application, the Commissioner must find
that the business entity has designated a licensed insurance producer responsible for the business entity's compliance with the insurance laws and rules of this state.
What factors into who and how deep the examination goes?
the Commissioner will consider matters such as the results of financial statement analyses, changes in management or ownership, and actuarial opinions and reports of independent certified public accountants.
Before approving a license application, the Commissioner will verify
the applicant's identity, including fingerprints for submission to the Washington State patrol and FBI for criminal history background checks and must 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 completed a prelicensing course of study for the lines of authority for which the person has applied; has paid the appropriate fees; and has successfully passed the examinations for the lines of authority for which the person has applied.
If the compensation received by an insurance producer who is dealing directly with the insured includes a fee, for each policy, the insurance producer must disclose in writing to the insured:
the full amount of the fee paid by the insured; the full amount of any commission paid to the insurance producer by the insurer, if one is received; an explanation of any offset or reimbursement of fees or commissions; when the insurance producer may receive additional commission, notice that states the insurance producer may receive additional commission (future incentive compensation) from the insurer, which is only paid if the performance criteria is met, and will furnish to the insured or prospective insured specific information relating to additional commission upon request; and the compensation disclosure must be provided by the insurance producer to the insured prior to the sale of the policy, and must be signed by both the insurance producer and the insured, and must be retained by the insurance producer for five years.
Anyone who files a grievance must supply as many facts as possible to assist in the investigation of the complaint, including:
the insurance company's name; the policy or claim number; the name of the agent, broker, solicitor, or adjuster; the date of the loss or the company's or other licensee's action; and a complete explanation of the loss or other problem.
A temporary insurance producer license may be issued for up to 180 days without an examination to:
the surviving spouse or court-appointed personal representative of a licensed insurance producer who dies or becomes mentally or physically disabled, to allow adequate time for the sale of the insurance business or for the recovery or return of the insurance producer to the business, or to provide for the training and licensing of new personnel to operate the business; a member or employee of a licensed business entity upon the death or disability of an individual designated in the business entity license; the designee of a licensed insurance producer entering active service in the armed forces; or an individual in any other circumstance in which the Commissioner deems that the public interest will be served.
If an insurance producer solicits insurance on behalf of an insurer, but it is later determined that the insurance producer was not eligible for appointment: the insurance contract
will be effective; the insurance producer must not receive compensation for the sale of the insurance product; or the insurance producer and the insurer may be subject to disciplinary action.