The Maryland Insurance Administration published a bulletin reminding insurers of their obligations regarding producer procedures.
The Administration has found instances of insurers accepting business from unlicensed producers, unappointed producers, or producers whose information was not accurately maintained on the insurer's internal register. Maryland insurance law requires insurers to verify a producer's licensing status before doing business with them.
Insurers are also required to properly maintain an internal producer register. Within 30 days of appointing a producer, an insurer must record details including the producer's name and address, state license number, and the effective date of the appointment. Insurers must check at least once every 31 days that a producer's license is still active and not suspended or revoked.
Finally, insurers are required to notify the Insurance Commissioner when a producer has been terminated due to engaging in any of the acts listed in MD Insurance Code §10-126, or "for cause". The statute includes actions such as intentional misrepresentation, committing fraudulent or dishonest practices in the insurance business, and others.
The bulletin can be found here.
Ray Sugrim
Ray Sugrim is an Insurance Editor with FC&S Expert Coverage Interpretation, a division of National Underwriter Company and Arc Network. Ray is responsible for helping develop and edit content for subscribers. Ray is a St John’s University graduate with a degree in Risk Management & Insurance and is a CPCU candidate.