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Insurance Producer Application Background Questions: What You Need to Know BEFORE You Apply

Insurance Producer Application Background Questions: What You Need to Know BEFORE You Apply

As part of the application process you are required to answer several background information questions, which the Department of Insurance and Financial Services (DIFS) reviews. In addition to reviewing the application, DIFS performs several background checks on each applicant. In the case of an agency, application background checks are run on the designated responsible licensed producer (DRLP) and all of the owners, partners, officers, and directors.

The following statutes control producer licensing in Michigan:

  • Section 1205 of the Code, MCL 500.1205 (Resident Producers)
  • Section 1206a of the Code, MCL 500.1206a (Non-Resident Producers)
  • Section 1239 of the Code, MCL 500.1239 (Denial of Licensure)

General Background Question Information

You are responsible for your application and the information provided in the application, even if someone else completes the application for you.

If you answer “YES” to a background question you must provide complete details and documentation as requested in the application. If necessary, DIFS may request additional documentation.

If you answer “NO” to a background question and we later find the answer should have been “YES,” your application may be denied.

Criminal Conviction Information

All convictions must be reported, including:

  • Misdemeanors, felonies, and/or military offenses.
  • Having a judgment withheld or deferred (commonly seen as adjudication withheld or judgment deferred).
  • Having a current or pending charge of committing a crime.
  • Felony traffic offenses.
  • Guilty conviction.
  • Offense where a plea of guilty or nolo contendere was entered.
  • Offense where probation was given.
  • Offense where a suspended sentence was given.
  • Offense where a fine was given.

The ONLY exceptions are:

  • Misdemeanor traffic offenses.
  • Juvenile “adjudications.”
  • Crimes that have been “set aside” or expunged by the court. This is not an automatic process and does not “just happen” after five or ten years. You must petition the court to have convictions “set aside” or expunged.

If you have had a judgment withheld or deferred, we will need documentation showing that you completed the court requirements (probation, community service, etc.) and documentation of the final disposition.

If you do not disclose a conviction on your application and one is found during the background investigation, the failure to disclose is a reason to deny you a license.

Felony Conviction Information

Having a felony on your record by itself may not be a reason to deny licensure; however, failing to report that you have a felony on your record might be. The following Code sections regarding felony convictions require the DENIAL OF AN APPLICATION, and the DENIAL will be reported to the NAIC national database.

IF YOU HAVE A FELONY CONVICTION that falls within these parameters, we strongly suggest that you DO NOT apply for licensure in Michigan. 1. MCL 500.1239(1)(d): “Having been convicted of a felony within 10 years before the uniform application was filed.” 2. MCL 500.1239(1)(e): “Regardless of the date of conviction, having been convicted of a felony involving any of the following: (i) Violence or threat of violence against an individual, including, but not limited to, domestic violence; (ii) Criminal sexual conduct; (iii)  A felony of a fiduciary nature or financial nature such as fraud, embezzlement, bribery, or extortion.”  

You can check your Michigan criminal record by going to the Michigan State Police’s ICHAT (Internet Criminal History Access Tool).

A license may also be denied under MCL 500.1239(2)(b): “Having been convicted of a felony other than a felony described in subsection (1)(e).”

Additional information:

  • Felonies do not “drop off” of your record.
  • You can apply to have your conviction expunged or set aside and do not need an attorney to start the process:

Instructions for setting aside a Michigan crime.

If your crime occurred in another state, contact the convicting court.

Administrative Action Information

All* administrative action must be reported, including:

  • Having a license censured.
  • Having a license suspended.
  • Having a license cancelled.
  • Having a license terminated.
  • Being assessed a fine.
  • Receiving a cease and desist order.
  • Receiving a compliance order.
  • Receiving a prohibition order.
  • Surrendering a license to resolve an administrative action.
  • Being party to an administrative or arbitration hearing.
  • Violating any insurance laws or violating any regulation, subpoena, or order of the commissioner or of another state’s insurance commissioner.
  • Having an insurance producer license or its equivalent denied or revoked.

*The only exceptions are terminations due solely to noncompliance with continuing education or failure to pay a renewal fee.

Administrative actions involving fraudulent, coercive, or dishonest practices or demonstrating incompetence, untrustworthiness, or financial irresponsibility in the conduct of business or actions involving insurance unfair trade practices, or fraud require licensure denial under MCL 500.1239(1)(f) and (g).

Child Support Information for Individual Applicants

If you have an obligation in arrearage, you will need to provide proof of compliance, which could include one or more of the following:

  • Proof of current payments.
  • Statement of compliance from court.
  • Updated repayment agreement.