License Discipline

Grounds for Revocation, Suspension, or Limitation

After a hearing, the Commissioner may revoke, suspend, or limit an intermediary’s license if any of the following applies:

• The intermediary repeatedly or knowingly violated an insurance statute, code regulation, or enforcement order of the Commissioner.
• The intermediary’s business methods and practices endanger the legitimate interests of customers and the public.
• The intermediary’s financial resources are inadequate to safeguard the legitimate interests of customers and the public.
• The intermediary provided false information on a licensing application or at renewal.
• The intermediary is unqualified, not competent, or not trustworthy.

Some grounds for license action don’t require a hearing first:

• Failure to pay required fees (revocation effective on the due date if the Commissioner gave reasonable notice).
• Failure to complete continuing education (same — revocation on the due date).
• Delinquent taxes or unemployment insurance contributions (mandatory revocation when certified by Revenue or Workforce Development).
• Failure to pay child or family support (mandatory suspension).

After the suspension or revocation, the intermediary can be reinstated only after satisfying the underlying requirement.

Reapplying After Revocation

If a license was revoked simply for nonpayment of fees or failure to complete CE, the intermediary may reinstate immediately upon paying the fees or completing the CE. There’s no waiting period.

For all other revocations, the Commissioner may specify a period of up to five years during which the intermediary may not apply for a new license. If the order doesn’t specify a period, the default is five years.

There’s also a faster reinstatement path for a license revoked for failing to pay renewal fees, failing to complete CE, or failing to pay delinquent taxes: within twelve months of revocation, the intermediary can reinstate the same license without completing new prelicensing education or passing a new written exam — but only if all prior CE requirements are met first. In the past twelve months, the intermediary has to start over and satisfy the standard examination and licensing requirements.

The Disciplinary Period — What’s Off Limits

When OCI disciplines an intermediary, the “disciplinary period” begins on the effective date of the termination of the license and ends on the date a new license is issued. During this period, both the disciplined intermediary and anyone who uses their services are subject to discipline.

A “disciplined person” includes the intermediary whose license was revoked or surrendered under a stipulation, any affiliate of that intermediary, any estate in which the disciplined intermediary owns 10% or more of the stock, and any employee of the disciplined intermediary.

During the disciplinary period:

• The disciplined intermediary may not be employed by, act as an intermediary for, or be affiliated with any person in the insurance intermediary business.
• No one may pay consideration or expenses to the disciplined intermediary that directly or indirectly relate to services performed during the disciplinary period (obligations incurred before the disciplinary effective date are not affected).
• No one may seek to obtain information from, or use information directly or indirectly from, the disciplined intermediary for the purpose of assisting in the sale of insurance.
• The disciplined intermediary may not be present during the solicitation of insurance, and no one may solicit insurance with the disciplined intermediary’s assistance — even if the disciplined person isn’t acting as an intermediary.
• No one may use or refer to an endorsement or referral by the disciplined intermediary for the purpose of soliciting insurance.

Why so strict? The point of discipline is to remove the bad actor from the business — for real. If a disciplined intermediary could just hand off their book to a partner and keep collecting commissions through the back door, the discipline would be meaningless. The breadth of these restrictions is what gives them teeth.