Mississippi State Regulations & NAIC Insurance Law

Licensing

To apply for a Mississippi resident producer’s license, you must:

• Be at least 18 years old
• Be a Mississippi resident before you submit your application

Pre-licensing course and exam

Mississippi requires 20 hours of approved prelicensing education per line of authority before an original producer license issues. An applicant seeking only the life line of authority is exempt, as are holders of certain professional designations for the matching line (Miss. Code Ann. § 83-17-251).

The passing score on the Mississippi producer examination is 65% for the life-only, accident and health-only and combined life and accident and health examinations, and 70% for every other examination (Pearson VUE, Mississippi Insurance Licensing Candidate Handbook).

Fingerprints/background check

The Commissioner reviews an applicant’s background before issuing a license, and many states require applicants to submit fingerprints for a state and FBI criminal history check as part of the application.

Controlled business

Controlled business is insurance written on the producer’s own life, property or interests, or on those of the producer’s family, employer or a business the producer controls. A producer may insure themselves and their family, but a license exists to sell insurance to the public, so states generally restrict obtaining or using a license principally to write controlled business.

Mississippi will not grant or renew a license sought mainly to write controlled business (insurance on the producer’s own interests or those of relatives, business associates, employers or employees). A violation is presumed probable when, over any 24-month period, commissions from controlled business exceed 35% of the producer’s total commissions (Miss. Code Ann. § 83-17-1).

Non-resident license

A producer licensed in another state can obtain a Mississippi nonresident license without taking Mississippi’s examination. Under the NAIC’s Producer Licensing Model Act, which most states have adopted in some form, a nonresident receives the license if the person:

• Is currently licensed as a resident, and in good standing, in the home state
• Has applied (the home-state application or the Uniform Application) and paid the fees
• Lives in a home state that grants nonresident licenses to residents of this state on the same basis (reciprocity)

Under the same model, a producer who moves to another state files a change of address, with certification from the new home state, within 30 days. A licensed producer who moves into a state applies for a resident license there within 90 days and does not repeat prelicensing education or the examination for lines already held.

Temporary license

Most states allow the insurance regulator to issue a temporary license, without an examination, when one is needed to keep an insurance business serviced. Typical cases are:

• The surviving spouse or personal representative of a producer who dies or becomes disabled, to allow time to sell the business or train new people
• A member or employee of a business entity producer, on the death or disability of its designated producer
• The designee of a producer entering active military service

The regulator may limit what a temporary licensee may do and may require a licensed sponsor who takes responsibility for the temporary licensee’s acts.

The Mississippi Commissioner may issue a temporary producer license for up to 180 days, without an examination, when one is necessary to service an insurance business (Miss. Code Ann. § 83-17-69(1)).

Military service

A Mississippi producer who cannot comply with license renewal procedures because of military service, or another extenuating circumstance such as a long-term medical disability, may request a waiver of those procedures and of any examination requirement, fine or sanction for failing to comply with them (Miss. Code Ann. § 83-17-63(4)).

Renewal and reinstatement

A producer license stays in effect only while the producer renews it on schedule: paying the renewal fee and completing continuing education by the due date.

A Mississippi individual producer license runs until the last day of the licensee’s birth month in the second year after it was issued or renewed, with a minimum term of 13 months (Miss. Code Ann. § 83-17-25).

A producer who misses the deadline and lets the license lapse may be able to reinstate it without retaking the examination.

A producer who lets a Mississippi license lapse may reinstate the same license within 12 months of the renewal fee’s due date without passing a written examination, paying the late-renewal penalty the privilege-license law sets (Miss. Code Ann. § 83-17-63(3)).

Continuing education

All states, including Mississippi, require continuing education (CE) to renew major lines (life, health, property, liability) insurance licenses.

In Mississippi, you must complete continuing education before renewing your license. The number of hours required is set by state law and published by the state insurance department.

Notice of change of name or address

A Mississippi licensee must inform the Commissioner of a change of address within 30 days of the change, and failing to report a change of legal name or address on time brings a penalty (Miss. Code Ann. § 83-17-63(6)).

The model also requires a producer to report to the regulator within 30 days any administrative action taken against the producer in another state or by another government agency, counted from the final disposition, and any criminal prosecution in any jurisdiction, counted from the initial pretrial hearing date. A producer who does business under any name other than their legal name must notify the regulator before using it.

Company regulations

An insurance company must be authorized by the Mississippi Insurance Department to conduct business in Mississippi.

To receive a certificate of authority, the company applies to the Commissioner and files its charter or articles of incorporation, financial statements showing that it meets the state’s capital and surplus requirements, and the other documents and fees the state requires.

Capital and surplus requirement

An insurer authorized to conduct insurance business in Mississippi must maintain minimum corporate standards.

A certificate of authority allows the insurer to conduct business in the state only if it maintains the minimum capital or permanent surplus required. In Mississippi, when a domestic company’s surplus falls below the required minimum, the Commissioner may suspend its certificate of authority until the surplus is restored (Miss. Code Ann. § 83-19-31(1)(e)); a company whose capital is impaired and not made good within three months after notice from the Commissioner loses its authority to write new business (§ 83-19-57).

Duties of the Commissioner of Insurance

The Mississippi Commissioner of Insurance is an elected state executive position in Mississippi state government. Mississippi elects insurance commissioners to four-year terms during gubernatorial election years.

The Commissioner executes all laws related to insurance companies, corporations, associations and fraternal orders, their agents, and adjusters. The Commissioner establishes and enforces regulations in the Mississippi insurance market in a manner that protects consumers and encourages economic development.

Those duties include:

• Investigate all claims and complaints of legal violations relating to insurance.

• If the Commissioner finds that laws have been violated, the findings and supporting documents may be referred for criminal prosecution.

• Monitor transactions of all companies including domestic, foreign, and alien insurance companies.

• The Commissioner must examine every insurer licensed in Mississippi at least once every five years, and may examine a company more often (Miss. Code Ann. § 83-5-205(1)).

• Audit the books and records of any resident producer as frequently as necessary.

• Collect all fees associated with producers and insurers.

• Determine and administer fines associated with violations for insurers and producers.

• Issue reports pertaining to the suspension and revocation of licenses of producers and certificates of authority for insurers.

• Approve documentation used by insurance companies such as forms and rates.

The Commissioner also serves as State Fire Marshal and administers the Mississippi Fire Prevention Code.

Sidenote

Know this...

The Commissioner does not have the authority to arrest, issue injunctions or sentence jail time. They can get the process started, but it takes a law officer to arrest and a judge or court of law to issue injunctions or sentence jail time.

In Mississippi, the Commissioner of Insurance is also the State Fire Marshal, and the deputy fire marshals, a division of the Insurance Department, may make arrests for violations of the fire laws (Miss. Code Ann. § 45-11-1).

Suspend, revoke or non-renew

The Commissioner has the authority to suspend, revoke, or refuse to renew a license for:

• Providing false information on the application for an insurance license.

• Omitting any relevant information on an application that would have disqualified the individual from being eligible to receive a license.

• Being found guilty of a violation or the noncompliance of insurance regulations and laws.

• Committing fraud while attempting to obtain an insurance license.

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

• Providing false information in reference to the terms and conditions of an insurance contract.

• Having been convicted of a felony.

• Having admitted or been found to have committed any insurance unfair trade practice or fraud.

• Having engaged in activities of a fraudulent nature which allowed the person to involve themselves in dishonest, coercive, untrustworthy, and financially irresponsible practices.

• Having had a prior insurance license revoked or suspended in a state other than Mississippi.

• Using another person’s identity and forging their name on an insurance application.

• Being found guilty of using unethical practices or cheating on an examination for an insurance license.

Cease and desist

If the Commissioner finds that a producer has violated the state’s insurance laws, the Commissioner may order the producer to cease and desist.

A cease and desist order does not, by itself, mean the producer’s registration has been suspended or revoked. It requires the producer to stop or limit the activity addressed in the order.

Hearing and penalties

A person facing action by the Commissioner is entitled to notice and an opportunity for a hearing, within time limits set by Mississippi law, and may ask a court to review the final order. Under Mississippi’s unfair trade practices law the hearing comes first: the Commissioner serves a statement of charges and notice of a hearing held at least 10 days later, and issues a cease and desist order only if the hearing finds a violation (Miss. Code Ann. §§ 83-5-39(1), 83-5-41(1)).

A person whose license the Commissioner refuses to issue or renew may demand a hearing in writing within 10 days, and the hearing is held within 30 days (Miss. Code Ann. § 83-17-71(2)).

A violation of the insurance laws can bring a civil penalty in addition to action against a license. State law sets the maximum, usually per violation and often with a cap on the total, and a higher tier commonly applies to a violation that was knowing or flagrant. Some violations are also crimes.

In addition to or instead of denying, suspending or revoking a license, the Commissioner may, after a hearing, impose a civil fine of up to $1,000 per violation (Miss. Code Ann. § 83-17-71).

Unfair claims settlement practices

These examples come from the NAIC’s model act. Mississippi’s unfair trade practices statute lists no claim-settlement practice (Miss. Code Ann. § 83-5-35).

• The intentional obstruction and delay of claims payment or the delay of a claims investigation is a violation of regulation.

• Neglecting to provide a prompt response and written explanation of insurance policy terms, conditions, and laws related to the contract are examples of unfair claims settlement practices.

• Failure to provide claims without launching a thorough investigation is a violation of regulation.

• Making settlement claims based on information contained on an application that has been altered without the insured’s consent is a violation of regulation.

• Denying a claim without conducting a thorough investigation.

• Attempting to settle a claim for less than fair market value.

Policy forms

Insurers file their policy forms with the Commissioner.

A Mississippi life insurance policy may not be issued or delivered until its form has been approved and filed by the Commissioner (Miss. Code Ann. § 83-7-17(1)). Property and casualty rates, policy forms and endorsements are filed at least 30 days before their effective date and are deemed approved unless the Commissioner disapproves them within 30 days of filing (Miss. Code Ann. § 83-2-7).

If a policy provision conflicts with Mississippi law, the policy is read as amended to conform to the law.

Record maintenance

A producer keeps records of each transaction (the policies placed, the insureds, the premiums received and any changes) and makes them available for the Commissioner’s inspection.

Fraudulent producer representation

An insurance producer who represents to the public that they are licensed to conduct insurance business in Mississippi, but has not passed the appropriate licensing examination, is in violation of regulation.

This includes public communications such as:

• Advertisements
• Letterheads
• Circulars
• Business cards
• Other methods of representation

A producer found guilty of conducting business in Mississippi in any line of insurance for which they are not properly licensed may have any other insurance license suspended or revoked.

Misrepresentation

• Misrepresentation involving the creation or distribution of policies, quotes, and illustrations designed to provide inaccurate information about the terms and conditions of a policy is prohibited.

• Providing inaccurate or incomplete information or comparisons regarding the benefits of a policy is an example of misrepresentation.

• Providing inaccurate or incomplete information for the purpose of inducing, or tending to induce, the lapse, exchange, conversion, forfeiture, or surrender of a policy is a violation as well (twisting).

False advertising

Making, publishing or circulating an advertisement, announcement or statement about the business of insurance that is untrue, deceptive or misleading is an unfair trade practice under state law, based on the NAIC’s model act. The medium does not matter: the rule reaches newspapers, magazines, radio and television, and also notices, circulars, pamphlets, letters, posters and any other way of placing the statement before the public. The model act’s test is whether the statement is untrue, deceptive or misleading, not whether the person meant to deceive.

Defamation

Defamation of an insurer is an unfair trade practice under state law, based on the NAIC’s model act: making, publishing or circulating an oral or written statement that is false, or maliciously critical of or derogatory to the financial condition of an insurer, and that is calculated to injure that insurer or any other person engaged in the business of insurance. Mississippi’s statute requires both: a statement that is false and maliciously critical of or derogatory to an insurer’s financial condition (Miss. Code Ann. § 83-5-35©). Spreading an untrue rumor that a competing insurer is about to fail is the classic example.

Boycott, coercion and intimidation

Entering into an agreement to commit, or by concerted action committing, any act of boycott, coercion or intimidation that results or tends to result in unreasonable restraint of, or monopoly in, the business of insurance is prohibited.

False financial statements

Making or circulating any false statement of an insurer’s financial condition with intent to deceive, or making a false entry in an insurer’s books with intent to deceive, is an unfair trade practice in Mississippi (Miss. Code Ann. § 83-5-35(e)). Providing materially untrue information in a license application, or intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance, is a ground for license discipline (Miss. Code Ann. § 83-17-71(1)(a), (e)).

Illegal inducements

Offering anything of value not specified in the policy (money, a service, a favor or a gift) as an inducement to buy insurance is prohibited unless state law expressly allows it, and any agreement made as part of the sale must be written into the policy.

Mississippi prohibits rebating: no insurer, employee, broker or agent may pay, allow or give, or offer, directly or indirectly, any rebate, discount, abatement, credit or reduction of the premium, or any special favor, advantage or valuable consideration not specified in the policy, as an inducement to insure (Miss. Code Ann. § 83-3-121).

States differ on promotional gifts. The NAIC’s model act lets producers and insurers give customers non-cash gifts, meals or charitable donations up to an amount the state considers reasonable, as long as the gift is not conditioned on buying or renewing a policy and is offered without unfair discrimination. Mississippi’s rebating statute names no allowance for such gifts (Miss. Code Ann. § 83-3-121).

Unfair discrimination

Unfair discrimination is treating people or risks that present the same hazard differently. The NAIC’s model act, on which state unfair trade practices laws are based, prohibits:

• Unfair discrimination between individuals of the same class and equal expectation of life in life insurance and annuity rates, dividends, benefits or terms
• Unfair discrimination between individuals of the same class and essentially the same hazard in health insurance premiums, benefits or terms
• Refusing, limiting or canceling coverage because of a person’s sex, marital status, race, religion or national origin
• In property and casualty insurance, refusing or limiting coverage solely because of a risk’s geographic location, unless sound underwriting and actuarial principles justify it, or solely because the applicant or insured is physically or mentally impaired

Many states also expressly forbid refusing or limiting coverage solely because a person is blind or partially blind. Mississippi’s own unfair discrimination provision covers discrimination between individuals of the same class in life insurance and annuities and in accident and health insurance (Miss. Code Ann. § 83-5-35(g)), and a Department regulation adds refusing, limiting or pricing life or health coverage solely because of blindness or partial blindness (19 Miss. Admin. Code Pt. 1, R. 14.05).

Errors & omissions

Errors & Omissions (E&O) insurance is a type of professional liability insurance that protects insurance agents if they are sued for negligent performance of their duties.

• E&O covers honest mistakes that result in (financial) damage to customers/prospects.
• E&O does not cover violations of insurance regulation.

Rebating

Mississippi licensed producers are prohibited from directly or indirectly giving any refund, discount, favor, or credit to reduce premiums to induce the purchase of insurance.

Sidenote

Know this...

To “solicit” or “negotiate” insurance implies that the person is licensed.

Sharing commission

Splitting or sharing commissions with a licensed producer is allowed.

• Both parties must be licensed in the line of business in which the commission is being split. Under the NAIC’s model act, a commission may also be paid to an insurance agency, or to a person who does not sell, solicit or negotiate insurance. Mississippi allows such a payment only where it does not break its own rule that no insurer or agent may pay a commission or other valuable consideration on a Mississippi risk to anyone not licensed as an insurance agent in Mississippi. The exceptions are a deceased agent’s surviving spouse or heirs, and a one-time nominal referral fee of a fixed dollar amount, paid to the agent’s or agency’s own unlicensed employee and not dependent on a sale (Miss. Code Ann. §§ 83-17-73(4), 83-17-7(1)).

Twisting

Providing false information or expressing derogatory ideas about the financial conditions of a competitor company with the intent to lapse or surrender an existing policy is a violation of the law.

Under the NAIC’s model act, twisting is a misrepresentation made to induce a policyholder to lapse, forfeit, surrender, exchange or convert a policy. A false or maliciously critical statement about a competing insurer’s finances, made to injure it, is defamation.

Any written or oral statements used to induce the lapse, termination, exchange, or surrender of an insurance contract based on inaccurate information is prohibited.

Unfair marketing practices

The Insurance Department establishes minimum standards for full and fair disclosure of policy content. It also requires standardization and simplification of the terms used to describe insurance coverage.

Advertising may not involve the following:

• Any statement or implication that policies are approved, or that the financial condition of a company is endorsed, by any government agency or by any independent group, individual, organization or society, unless that is the fact.

• Any statements regarding advertising that are false or untrue in reference to the time frame in which claims are paid.

Gramm-Leach Bliley Act (GLBA)

This law repealed the Glass-Steagall Act of 1933, allowing consolidation of commercial banks, investment institutions and insurance companies.

GLBA established a framework of responsibilities of federal and state regulators for these financial industries. It permits financial services companies to merge and engage in a variety of new business activities, including insurance, while attempting to address the regulatory issues raised by such combinations.

McCarran-Ferguson Act

Federal law signed in 1945 in which Congress declared that the insurance industry would be regulated at the state level. Grants insurers a limited exemption from federal antitrust legislation. Since 2021 the exemption does not cover the business of health insurance, apart from narrow activities such as sharing historical loss data (15 U.S.C. § 1013©).

National Association of Insurance Commissioners (NAIC)

The U.S. standard-setting and regulatory support organization is created and governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories.

Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight. NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally.

NAIC members, together with the central resources of the NAIC, form the national system of state-based insurance regulation in the U.S.

Fair Credit Reporting Act

The Fair Credit Reporting Act (FCRA, 15 U.S.C. 1681) regulates consumer reporting agencies and the use of consumer reports, such as credit reports, MIB records and investigative reports, including in insurance underwriting.

• When an insurer requests an investigative consumer report, it must disclose that to the consumer within 3 days of the request
• When an insurer takes adverse action based on a consumer report, it must notify the consumer and identify the reporting agency. The consumer then has 60 days to request a free copy of the report and may dispute inaccurate information

Privacy Act of 1974

The federal Privacy Act of 1974 governs how federal agencies handle personal information. It does not apply to private insurers. An insurer’s use of an applicant’s personal information is governed by the FCRA, the Gramm-Leach-Bliley Act and state insurance privacy law.

Under Mississippi’s insurance privacy regulation, an authorization to disclose a consumer’s nonpublic personal health information must state how long it remains valid, which may be no more than 24 months (19 Miss. Admin. Code Pt. 1, R. 28.18(B)).

Telemarketing

The National Do Not Call Registry is a list of telephone numbers whose owners do not want to receive telemarketing calls. Telemarketers may not call registered numbers without the person’s permission or an established business relationship, and unsolicited sales calls:

• May be made only between 8 a.m. and 9 p.m. in the recipient’s local time under federal rules; Mississippi’s own law is narrower, allowing telephone solicitations only between 8 a.m. and 8 p.m. Central Standard Time and none on a Sunday, including by insurance agents (Miss. Code Ann. §§ 77-3-723(1), 77-3-711)
• Must disclose the caller’s identity, the company the caller represents and that the purpose is a sale

CAN-SPAM

A commercial email must:

• Be identified clearly as an advertisement
• Carry accurate header information and a subject line that is not deceptive
• Include the sender’s valid physical postal address
• Offer a way to opt out, and the sender must honor an opt-out within 10 business days

Insurance guaranty association

Every state has a property and casualty insurance guaranty association that pays covered claims when a member insurer becomes insolvent. Insurers licensed to write the covered lines in the state must belong to it, and it is funded by assessments on its members.

The Mississippi Insurance Guaranty Association pays most covered claims in an amount over $50 and up to $300,000 per claimant, never more than the insolvent insurer’s policy limit (Miss. Code Ann. § 83-23-115(1)(a)).

Auto insurance state minimum

A state’s financial responsibility law sets the minimum liability an auto policy must carry, written as a split limit: the first number is bodily injury liability per person, the second bodily injury liability per accident, and the third property damage liability per accident, each in thousands of dollars.

Mississippi’s minimum auto liability limits are $25,000 bodily injury per person, $50,000 bodily injury per accident and $25,000 property damage, or 25/50/25 (Miss. Code Ann. § 63-15-43(2)(b)).