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    Entity Producer License

    The Department of Insurance and Financial Services issues

    A. NAME OF PERMIT OR APPROVAL

    B. STATUTORY AUTHORITY

    C. APPLICABLE REGULATION

    D. SUMMARY OF PERMIT/APPROVAL PROCESS

    1. Applicability (activities that require the permit)
    2. Pre-Application Requirements
    3. Application Submission Requirements
    4. Procedures and Time-Frame for Obtaining Permit or Approval
    5. Operational Requirements
    6. Fees
    7. Operational Requirements
    8. Public Input Opportunities

    E. CONTACT INFORMATION


    A. NAME OF PERMIT OR APPROVAL:

    Producer - Agency License

    B. STATUTORY AUTHORITY:

    The Insurance Code of 1956 - Chapter 12

    C. APPLICABLE REGULATION:

    PA 218 of 1956 The Insurance Code of 1956

    D. SUMMARY OF PERMIT/APPROVAL PROCESS:

     1.  Applicability (activities that require the permit)

    A business entity that acts as an insurance producer in any manner (sells, solicits, negotiates, advertises, collects commission) must be licensed in Michigan. The types of business entities that can be licensed in Michigan are corporations, limited liability companies, limited liability partnerships, partnerships, or sole proprietorships.

     2.  Pre-Application Requirements
    • Applicant is responsible for reviewing the associated laws, regulations, and other documents governing producer agencies. (Please see the "Statutes, Rules and Regulations," "Bulletins" and "Hearings and Decisions" sections at: Department of Insurance and Financial Services. The agency performs background checks on all applicants and a letter may be issued requesting additional information.
    • The agency must obtain a Federal Employer Identification Number (FEIN) where applicable and register with the appropriate government agency. A business entity must meet certain name requirements prior to approval.
    • An individual who is licensed in Michigan and holds the qualification for which the agency is applying must be affiliated with the agency prior to licensure. The individual may hold a resident or non-resident license. If the individual is not licensed, refer to Producer/Individual Licensing.
    • To license a Title Agency, follow the same procedures used to license the appropriate business type.
     3.  Application Submission Requirements

    The uniform application must be completed in its entirety to include:

    Resident Producer Agency

    Organizational Documents

    • Include partnership agreement or sole proprietorship filing. Articles of incorporation or articles of organization are checked via the state corporations website.

    Appointment Requirements

    • The appointment must be submitted by the company electronically through NIPR within 15 days from the date the agency contract is executed or the first insurance application is submitted.

    Other Requirements

    • Attorney General Opinion No. 5756 states that in its name an agency may use the word "insurance" only in conjunction with the word "agency". Also, an agency may not use the term "insurance company", which might give the appearance of the entity being an underwriter."
    • Attach a business check or money order for $10 ($110 for Surplus Lines or $110 if applying for producer and Surplus lines on one application) made payable to State of Michigan.
    • Include FIS 0223 Fee Processing Card.
    • List the licensed agents, officers, directors and shareholders of 10% or more on page one of the application. There must be at least one licensed responsible producer holding the same license, lines of authority, and appointments as the business entity.
    • Title applicants-Indicate ""Title"" on page 3, in ""Other"" column.
    • Limited life applicants-Indicate 'Limited Life' on page 3, in 'Other' column.

    Non-Resident Producer Agency

    Organizational Documents

    • Include Articles of Incorporation, Articles of Organization, or Partnership Agreement if the business is not licensed in the home state.

    Appointment Requirements

    • The appointment must be submitted by the company electronically through NIPR within 15 days from the date the agency contract is executed or the first insurance application is submitted.

    Other Requirements

    • Attach a business check or money order for $10 ($110 for Surplus Lines or $110 if applying for producer and Surplus lines on one application) made payable to State of Michigan
    • Include FIS 0223 Fee Processing Card.
    • Michigan checks the PDB for home state verification of license status, making a certification unnecessary.
    • List the licensed agents, officers, directors and shareholders of 10% or more on page one of the application. There must be at least one licensed responsible producer holding the same license, lines of authority, and appointments as the business entity.
    • Title applicants-Indicate ""Title"" on page 3, in ""Other"" column.
    • Limited life applicants-Indicate 'Limited Life' on page 3, in 'Other' column.
    • Attorney General Opinion No. 5756 states that in its name an agency may use the word "insurance" only in conjunction with the word "agency". Also, an agency may not use the term "insurance company", which might give the appearance of the entity being an underwriter."
     4.  Procedures and Time-Frame for Obtaining Permit or Approval
    • DIFS uses The Guiding Principles to conduct qualification reviews of producer applications.
    • Section 1239(1) of the Code, MCL 500.1239(1), states:

    In addition to any other powers under this act, the commissioner may place on probation, suspend, or revoke an insurance producer's license or may levy a civil fine under section 1244 or any combination of actions, and the commissioner shall refuse to issue a license under section 1205 or 1206a, for any 1 or more of the following causes:

    (a) Providing incorrect, misleading, incomplete, or materially untrue information in the license application.

    (b) Violating any insurance laws or violating any regulation, subpoena, or order of the commissioner or of another state's insurance commissioner.

    (c) Obtaining or attempting to obtain a license through misrepresentation or fraud.

    (d) Improperly withholding, misappropriating, or converting any money or property received in the course of doing insurance business.

    (e) Intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance.

    (f) Having been convicted of a felony.

    (g) Having admitted or been found to have committed any insurance unfair trade practice or fraud.

    (h) Using fraudulent, coercive, or dishonest practices or demonstrating incompetence, untrustworthiness, or financial irresponsibility in the conduct of business in this state or elsewhere.

    (i) Having an insurance producer license or its equivalent denied, suspended, or revoked in any other state, province, district, or territory.

    (j) Forging another's name to an application for insurance or to any document related to an insurance transaction.

    (k) Improperly using notes or any other reference material to complete an examination for an insurance license.

    (l) Knowingly accepting insurance business from an individual who is not licensed.

    (m) Failing to comply with an administrative or court order imposing a child support obligation.

    (n) Failing to pay the single business tax or the Michigan business tax or comply with any administrative or court order directing payment of the single business tax or the Michigan business tax.

    • A producer shall not sell, solicit or negotiate until issuance of the license. An individual or agency may not act as an agent of an insurer unless the producer becomes appointed with that insurer (MCL 500.1208) .
    • The Insurance Licensee Locators can be accessed to verify licensure.
     5.  Operational Requirements

    Renewals

    There are no renewal invoices generated for resident or non-resident individuals and business entity producers (with the exception of surplus lines). The standard individual resident producer licenses are perpetual as long as the licensees are compliant with continuing education credit requirements, and individual non-resident licensees hold the appropriate home state resident licenses in good standing.

    Each authorized insurance company is invoiced annually in January for all active producer appointments. The company should verify the accuracy of its list of active individual and agency producers that is emailed to them, and electronically cancel all unnecessary appointments prior to December 31st. The insurer will be charged for all active appointments as of January 1st. Payment is due 30 days from the invoice date printed on the invoice. Both dates are clearly printed on the invoice.

    Producers appointed by insurer lists may be generated using the Producers Appointed by an Insurance Company Locator.

    Address Changes

    Michigan law (MCL 500.1238(1)) requires any agent, solicitor, counselor, or adjuster to notify the commissioner of any change in his or her mailing address within 30 days of such change. To change a mailing address submit:

    • Resident producers, and non-resident producers living in states which participate in ACR: Address Change Request through the NIPR.
    • Nonresident producers living in states which do not participate in the ACR; all adjusters, counselors and solicitors: FIS 0262 Name or Address Change for Insurance Licensees. A new license is generated and mailed automatically.

    Appointments/Cancellations

    The Michigan Insurance Code requires the licensure and appointment of producers in Michigan so that consumers can be protected and assured that insurance transactions are properly effected. Insurance companies are authorized to write a particular line or lines of coverage (also known as qualifications, e.g life, health, etc.). Before an insurance company may appoint a licensee for a qualification, the company must first be authorized to write that particular line in Michigan. It is the responsibility of the insurer to make sure our records accurately reflect its producer/agency work force. An individual or agency may not act as an agent of an insurer unless the producer becomes properly appointed with that insurer. An agency may not receive its appointment until an affiliated individual producer is licensed for the identical qualification and appointed by the same insurer.

    By law, insurers are responsible to consumers for the acts of their appointed producers. In Michigan "health benefit corporations," i.e., Blue Cross/Blue Shield, nonprofit dental care corporations, and HMOs are considered insurers for purposes of appointment requirements. When it submits an appointment, the company attests that it has investigated the applicant and has found the applicant to be worthy of the public's trust. When a producer or other licensee mishandles a transaction, either through misfeasance or malfeasance, the insurer may be held liable to the consumer for rectifying such transactions. A producer is a fiduciary for the insurer and is responsible for promptly remitting all premiums and other insurance proceeds to the insurer as provided by law or contract. "Brokerage" is not allowed in Michigan. A broker represents a consumer - not an insurer. Acts of misfeasance or malfeasance by a person acting as a broker do not bind any insurer and thereby place the consumer at risk.

    Process

    A notice of appointment for the qualifications held by the producer must be electronically filed with our office by the insurer within 15 days from the date the first insurance application is submitted or an agency contract is executed. The effective date requested on an appointment submission cannot be more than 15 days prior to, or after, the date the electronic appointment is submitted to our office. An appointment submitted outside of these parameters will generate an error notice to the insurer and a producer will not be considered properly appointed.

    Appointment cancellations must also be electronically filed with our office by the insurer. The exception is that any cancellation for cause must be submitted in writing accompanied by an explanation. The effective date requested on an electronic cancellation submission cannot be more than 30 days prior to, or after, the date the cancellation is submitted to our office.

    Cancellation of an appointment will not affect the status of the license or qualification.

    Advertising Guidelines

    Following are Administrative Rules which provide the standards for acceptable insurance advertising:

    Agency Affiliations

    An agency affiliation must be added or inactivated as persons join or leave the agency. The Agency Affiliation Form (FIS-0200) is used to add or inactivate the affiliation. There is no fee attached to this form.

    Assumed Names/dba's

    An assumed name is a name other than the official name of the licensee as maintained in our database. Information is available regarding Choosing a Business Name and filing the Certificate of Assumed Name for use by corporations, limited partnerships and limited liability companies with the appropriate jurisdictional authorities (the county clerk or the State of Michigan).

    Use form FIS 0201 to register a DBA with our office.

    Name Change

    An agency producer that is changing the agency name but not an FEIN change is required to submit form FIS 0262 and a copy of its amended articles of incorporation/organization, partnership or new dba filing.

    A new license is generated and mailed automatically. There is no fee.

    Document Requests

    Accurate producer license information is available on the Insurance Licensee Locators and the NAIC Producer Licensing Database. To document licensure, companies should print a screen of the producer's license status as needed.

    Use FIS 0261 Document Request to request:

    • a duplicate license (to replace a license that was lost, stolen, destroyed or never received) .
    • a letter of clearance. Prior to applying for licensure in another state, an applicant should research any specific statutes or rules for that state (e.g. minimum length of required resident licensure in prior state). Most states rely on verification of applicant's previous resident license through the NAIC Producer Licensing Database in lieu of original letter of clearance. Clearances are available for individual licensees only. Return the original license or complete the affidavit.
    • a letter of certification. Necessary for surplus lines producer licensure in some states. States rely on verification of applicant's resident producer license through the NAIC Producer Licensing Database in lieu of original letter of certification.
    • a license history. For current license, qualification, appointment and continuing education status, access the Insurance Licensee Locator for individuals and the Insurance Agency Locator for agencies.
    • There is no charge for the services listed in the document requests section.
     6.  Fees
    • Application/License fee - $10.00
     7.  Appeal Process

    Section 1239(2) of the Code, MCL 500.1239(2), states:

    Before the commissioner denies an application for a license under section 1205 or 1206a, the commissioner shall notify in writing the applicant or licensee of the denial and of the reason for the denial. Not later than 30 days after this written denial, the applicant or licensee may make written demand upon the commissioner for a hearing before the commissioner to determine the reasonableness of the commissioner's action. A hearing under this subsection shall be held pursuant to the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328.

    To appeal a denial of an application, a signed, written request for a hearing is required.

     8.  Public Input Opportunities

    We encourage consumers to first attempt to resolve disputes directly with their financial service entity. If a resolution cannot be reached, our office can try to help resolve a dispute. A complaint form must be completed for the type of financial service you are having difficulty with.


    E. Contact Information:

    Contact Us

     

    Creation/Revision Date:

    October 2013

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