Missouri State Regulations & NAIC Insurance Law

Licensing

Any individual applying for a Missouri resident producer’s license must:

Be at least 18 years old
Have Missouri as the state of your principal place of residence or principal place of business, the test Missouri law uses for a producer’s home state (Mo. Rev. Stat. § 375.012.2(3))

Pre-licensing course and exam

Missouri requires a resident applicant to pass the examinations for the lines of authority applied for (Mo. Rev. Stat. § 375.015.1). The examination tests the applicant’s knowledge of those lines, of a producer’s duties and responsibilities, and of Missouri’s insurance laws and regulations (Mo. Rev. Stat. § 375.016.1).

In Missouri, an applicant who fails the examination may reapply for it, paying all required fees again before being rescheduled (Mo. Rev. Stat. § 375.016.4). An applicant who passes has one year from the date of the examination to apply for the license, or must take and pass the examination again (20 CSR 700-1.010(3)(C)).

Fingerprints/background check

The Director reviews an applicant’s background before issuing a license.

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.

Non-resident license

A producer licensed in another state can obtain a Missouri nonresident license without taking Missouri’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 submitted the proper request for the license and paid the fees
Has submitted the application filed in the home state, or the Uniform Application
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.

Missouri follows the model: a nonresident receives a Missouri nonresident producer license if the person is currently licensed as a resident and in good standing in the home state, has requested the license and paid the fees, has submitted the home-state application or the uniform application, and lives in a home state that awards nonresident producer licenses to Missouri residents on the same basis (Mo. Rev. Stat. § 375.017.1). A nonresident producer who moves to another state, or a resident producer who moves from Missouri to another state, files a change of address within 30 days of the change of legal residence (Mo. Rev. Stat. § 375.017.3). A producer licensed in another state who moves to Missouri applies for a resident license within 90 days of establishing legal residence, and needs no examination for lines held in the prior state unless a regulation provides otherwise (Mo. Rev. Stat. § 375.016.6).

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

Under the NAIC’s model act, the regulator may also issue one in any other circumstance where it finds that the public interest will best be served. Missouri’s statute names the same four cases (Mo. Rev. Stat. § 375.025.1).

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. In Missouri, the sponsor the Director may require is a licensed producer or an insurer (Mo. Rev. Stat. § 375.025.2).

In Missouri, a temporary license may be issued for no more than ninety days (Mo. Rev. Stat. § 375.025.1). The Director may issue one without an examination when it is needed to service an insurance business: to the surviving spouse or court-appointed personal representative of a producer who dies or becomes disabled, to a member or employee of a business entity producer on the death or disability of the individual named in its application or license, to the designee of a producer entering active service in the Armed Forces, or in any other circumstance where the public interest will best be served (Mo. Rev. Stat. § 375.025.1). A temporary license may not continue after the owner or the personal representative disposes of the business (Mo. Rev. Stat. § 375.025.2).

Military service

A Missouri 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 fine or sanction imposed for not complying with them (Mo. Rev. Stat. § 375.018.10). A Missouri resident on active duty in a military conflict for which reserve components have been called up, for 30 days or more, whose producer license expires during that service may renew it within 60 days of completing the service without penalty (Mo. Rev. Stat. § 41.950.1(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 Missouri producer license is issued for a term of two years and is renewed every two years on the producer’s birth date, for a renewal fee of $100 (Mo. Rev. Stat. § 375.018.1, .3).

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

In Missouri, a producer may reinstate an expired license within twelve months of the renewal fee’s due date without an exam, with proof that continuing education was met and a penalty of $25 for each month the license was expired (Mo. Rev. Stat. § 375.018.4). After twelve months the license cannot be renewed, and the person applies for a new license and meets the examination requirements again (Missouri Department of Commerce and Insurance, Producer Licensing FAQs).

Continuing education

All states have continuing education (CE) requirements a producer must meet to renew a license. In Missouri, every insurance producer licensed to sell insurance, unless exempt, must complete continuing education; the requirement does not apply to licenses for kinds of insurance for which Missouri law requires no examination, or to limited lines or restricted licenses the Director exempts (Mo. Rev. Stat. § 375.020.1, .7). A Missouri producer completes at least 16 hours of instruction during each two years, and the courses must include instruction on Missouri law, products in the producer’s lines of authority, producers’ duties and obligations to the department, and business ethics, including sales suitability (Mo. Rev. Stat. § 375.020.1). Within them, 3 hours of instruction must cover ethics, Missouri law, and producer duties and obligations to the department (20 CSR 700-3.200(2)). Hours beyond the requirement may be carried forward to the next two-year period only (Mo. Rev. Stat. § 375.020.4). Individuals licensed in the state of Missouri must complete continuing education prior to renewing their 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 Missouri producer informs the Director of a change of address within 30 days of the change, and failing to report a change of legal name or address on time can bring a forfeiture of up to $10 a month (Mo. Rev. Stat. § 375.018.7). If an unreported address change keeps the Director from serving the producer with a complaint, the Director may immediately revoke the license until service can be made (Mo. Rev. Stat. § 375.141.5).

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. In Missouri, the criminal prosecutions a producer must report to the Director, within 30 days of the initial pretrial hearing date, are those for a felony or a crime involving moral turpitude, in any jurisdiction (Mo. Rev. Stat. § 375.141.7). 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 Department of Commerce and Insurance to conduct business in Missouri. To receive a certificate of authority, the company applies to the Director 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

A company that has been authorized to conduct insurance business in Missouri must maintain minimum standards as a corporation. An insurer must maintain the capital and surplus the law requires: under Missouri law, a domestic stock insurer must have and maintain both a minimum capital and a minimum surplus, and a domestic mutual insurer a minimum surplus (Mo. Rev. Stat. §§ 376.280, 379.010). In Missouri, the Director may revoke or suspend the certificate of authority of a foreign insurer that fails to maintain the required capital or surplus (Mo. Rev. Stat. § 375.881(2)).

Duties of the Director of the Department of Commerce and Insurance

The Missouri Director of the Department of Commerce and Insurance is a state executive position in Missouri state government. The Director oversees the Missouri Department of Commerce and Insurance and is responsible for policy decisions, regulation, legislation, and communications. The Director of the Department of Commerce and Insurance is appointed by the Governor and serves at the Governor’s pleasure. The Governor appoints the Director with the advice and consent of the Senate, and the Director holds office concurrently with the Governor and until a successor is appointed and qualified (Mo. Rev. Stat. § 374.020.1).

The Director is responsible for establishing and enforcing regulations in the Missouri 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 Director 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.
Examine the financial condition of insurers; the NAIC’s model examination law calls for every insurer to be examined at least once every five years. Missouri examines every licensed insurer at least once every five years (Mo. Rev. Stat. § 374.205.1(1)).
Examine any company, a term that reaches any person engaging in or proposing or attempting to engage in any transaction or kind of insurance business, as often as the Director in his or her sole discretion deems appropriate (Mo. Rev. Stat. §§ 374.202.2(1), 374.205.1(1)). Under the NAIC’s examination model, the regulator may examine any person subject to its authority, nonresident producers included, as often as it considers appropriate.
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.
Review the policy forms and rates insurers file, and approve those the law requires to be approved: the forms that need approval are described under Policy forms, and a property and casualty insurer’s filing of its rates and rating plans within ten days after they take effect is sufficient compliance with Missouri’s filing law, except for commercial property and commercial casualty insurance, whose filing requirements differ (Mo. Rev. Stat. § 379.321.1, .6).

Sidenote

Know this...

The Director inquires into violations of the insurance laws and may refer the evidence to the prosecuting attorney or circuit attorney for criminal proceedings (Mo. Rev. Stat. §§ 374.190.1, 375.991.4). An arrest is made by a law enforcement officer. An injunction comes from the circuit court, in an action the Director brings (Mo. Rev. Stat. § 374.048), and a jail sentence follows a criminal conviction, such as for willfully violating a final cease and desist order (Mo. Rev. Stat. § 374.046.16(1)). A proceeding to suspend or revoke a producer license goes to the Administrative Hearing Commission (Mo. Rev. Stat. § 374.051.2).

Suspend, revoke or non-renew

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

Intentionally providing materially incorrect, misleading, incomplete or untrue information in the license application (Mo. Rev. Stat. § 375.141.1(1)).
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. Missouri’s ground also covers a crime involving moral turpitude (Mo. Rev. Stat. § 375.141.1(6)).
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 Missouri. Under the NAIC’s model act, a license denied in another state is also a ground. So is Missouri’s: having an insurance producer license, or its equivalent, denied, suspended or revoked in any other state, province, district or territory (Mo. Rev. Stat. § 375.141.1(9)).
Using another person’s identity and forging their name on an insurance application.
Improperly using notes or any other reference material to complete an examination for an insurance license (Mo. Rev. Stat. § 375.141.1(11)).

Cease and desist

If the Director finds that a producer has violated the state’s insurance laws, the Director may order the producer to cease and desist. In Missouri, the Director may also order a person who is engaging in, or has taken a substantial step toward engaging in, a violation of the insurance laws to cease and desist (Mo. Rev. Stat. § 374.046.1(1)). The recipient of a cease and desist order has not had their registration suspended or revoked, but must stop or limit the activity addressed in the order.

Hearing and penalties

A person facing action by the Director is entitled to notice and an opportunity for a hearing, within time limits set by Missouri law, and may ask a court to review the final order.

In Missouri the hearing usually comes first: the Director serves a statement of reasons with an order to show cause and schedules a hearing at least ten days later before issuing a final order; an order effective on issuance, without a prior hearing, is allowed only for violations of the laws against selling, soliciting or negotiating insurance without a license, fraud or misrepresentation in a sale, and transacting insurance without authority (Mo. Rev. Stat. §§ 375.014, 375.144, 375.310), while consumers are being harmed (Mo. Rev. Stat. § 374.046.3-.4). Such a summary order becomes final if no hearing is requested or ordered within 30 days of its service (Mo. Rev. Stat. § 374.046.5), and a proceeding to suspend or revoke a producer license is referred to the Administrative Hearing Commission (Mo. Rev. Stat. § 374.051.2).

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. Some violations are also crimes.

In Missouri, a violation of the producer licensing law is a level two violation, for which the Director may order a civil penalty of up to $1,000 per violation, up to $50,000 a year for multiple violations; fraud or misrepresentation in the sale of insurance (Mo. Rev. Stat. § 375.144) is a level four violation, up to $10,000 per violation and $250,000 a year (Mo. Rev. Stat. § 375.145.1; Mo. Rev. Stat. § 374.049.2). A knowing violation may be raised one level, and one committed knowingly in conscious disregard of the law two levels (Mo. Rev. Stat. § 374.049.7).

Unfair claims settlement practices

Under the NAIC’s model act, these practices are violations when committed flagrantly and in conscious disregard of the law, or often enough to indicate a general business practice. Missouri’s improper claims practices law reaches an insurer that commits a listed act in conscious disregard of the law or with such frequency as to indicate a general business practice (Mo. Rev. Stat. § 375.1005). Under Missouri’s Unfair Claims Settlement Practices Act, a violation committed flagrantly and in conscious disregard of the act carries a higher maximum penalty (Mo. Rev. Stat. §§ 375.1000.1, 375.1012.1(1)).

Unreasonably delaying the investigation or payment of claims by requiring both a formal proof of loss form and subsequent verification that would result in duplication of information and verification appearing in the formal proof of loss form.
Failing, in the case of claims denials or offers of compromise settlement, to promptly provide a reasonable and accurate explanation of the basis for such actions.
Refusing to pay claims without conducting a reasonable investigation.
Attempting to settle claims on the basis of an application which was materially altered without notice to, or knowledge or consent of, the insured (Mo. Rev. Stat. § 375.1007(9)).
Attempting to settle or settling a claim for less than the amount a reasonable person would believe the insured or beneficiary was entitled to by reference to written or printed advertising material accompanying or made part of an application.

Policy forms

Insurers file their policy forms with the Director.

In Missouri, a life insurance or annuity form must be filed with and approved by the Director before delivery, and a form the Director does not act on within 45 days is deemed approved (Mo. Rev. Stat. § 376.675). That deemed approval lasts until the Director notifies the company of a disapproval (Mo. Rev. Stat. § 376.675). Group accident and health policy forms also need the Director’s approval, and the filing rules must treat a form not acted on within 45 days of filing as approved (Mo. Rev. Stat. § 376.405). A private passenger auto, homeowners, dwelling, residential fire or renters policy form is deemed approved when it is submitted; the Director reviews it within 60 days and may ask the Administrative Hearing Commission to disapprove it (Mo. Rev. Stat. § 375.920).

Under the usual conformity rule, which many states’ insurance codes write into law, a policy provision that conflicts with state law does not make the policy invalid: the policy is read as amended to conform to the law.

In Missouri, a life insurer may lend a policyholder up to the legal reserve it must keep on the policy, on the security of the policy’s cash surrender value (Mo. Rev. Stat. § 376.306).

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 Director’s inspection.

Missouri requires a producer’s records on a personal insurance policy to be kept for as long as the policy is in force and for at least three years afterward (20 CSR 700-1.140(5)(D)).

Fraudulent producer representation

In Missouri, no person may sell, solicit or negotiate a class of insurance without a license for that line of authority (Mo. Rev. Stat. § 375.014.1), and an untrue, deceptive or misleading statement about the business of insurance, such as a producer’s claim to be licensed for insurance the producer is not licensed to sell, is the false advertising Missouri’s unfair trade practices law lists, in whatever medium it appears (Mo. Rev. Stat. § 375.936(4)). Any means of public communication is included, such as advertisements, letterheads, circulars, business cards, and other methods of representation.

In Missouri, knowingly acting as an insurance producer when not licensed, or otherwise violating the insurance laws, is a ground to suspend or revoke the producer’s license, and the Director refers such a proceeding to the Administrative Hearing Commission (Mo. Rev. Stat. §§ 375.141.1(2), (12), 374.051.2).

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. Under the NAIC’s model act, any estimate, illustration or statement that misrepresents a policy’s benefits, advantages, conditions or terms is an unfair trade practice when committed flagrantly and in conscious disregard of the law, or often enough to indicate a general business practice. In Missouri, such a misrepresentation is an unfair trade practice when committed in conscious disregard of the law or with such frequency as to indicate a general business practice (Mo. Rev. Stat. §§ 375.934, 375.936(6)).
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 purchase, lapse, forfeiture, exchange, conversion, or surrender of any policy is a violation as well (Mo. Rev. Stat. § 375.936(6)(f)); aimed at the lapse, forfeiture, exchange, conversion or surrender of an existing policy, it is twisting.

False advertising

In Missouri, a practice the unfair trade practices law lists, such as false advertising, defamation or misrepresentation, is an unfair trade practice when committed in conscious disregard of the law or with such frequency as to indicate a general business practice, and the law counts agents and brokers as insurers for this purpose (Mo. Rev. Stat. §§ 375.934, 375.932(3)).

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. Under the model act, such a statement is an unfair trade practice when committed flagrantly and in conscious disregard of the law, or often enough to indicate a general business practice. Some state laws adopt this condition, and others reach a single such statement.

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 such insurer. Some states’ laws reach further, to a statement calculated to injure any person engaged in the business of insurance. Missouri’s statute reaches such a statement when it is calculated to injure the insurer itself (Mo. Rev. Stat. § 375.936(2)). Spreading an untrue rumor that a competing insurer is about to fail is the classic example.

Boycott, coercion and intimidation

In Missouri, entering into any agreement to commit, or by any concerted action committing, any act of boycott, coercion or intimidation resulting in or tending to result in an unreasonable restraint of, or monopoly in, the business of insurance is an unfair practice the unfair trade practices law lists (Mo. Rev. Stat. § 375.936(1)).

False financial statements

In Missouri, making false or fraudulent statements or representations on or relative to an application for a policy, for the purpose of obtaining a fee, commission, money or other benefit, is an unfair trade practice (Mo. Rev. Stat. § 375.936(7)).

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.

Missouri’s unfair trade practices law lists rebating: except as the law expressly provides, offering or giving, as an inducement to life, annuity, accident and health or other insurance, any rebate of premiums payable on the contract or any special favor or advantage in its dividends or other benefits (Mo. Rev. Stat. § 375.936(9)(a)). The law expressly does not treat certain practices as rebates, among them bonuses or premium abatements paid to nonparticipating life policyholders out of surplus from nonparticipating insurance, when fair and equitable, and readjusting a group policy’s premium rate on its loss or expense experience (Mo. Rev. Stat. § 375.936(9)(b)). Missouri’s property and casualty rating law also bars an insurer or producer from giving a rebate, discount, abatement, credit or reduction of the premium named in a policy, except as the insurer’s applicable filings provide, and bars an insured from knowingly accepting one (Mo. Rev. Stat. § 379.356.1).

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. Each state sets its own limit. Missouri’s statute names no gift allowance: its rebating law bars giving, as an inducement, any valuable consideration or inducement not specified in the contract, except as the law expressly provides (Mo. Rev. Stat. § 375.936(9)(a)).

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. Missouri’s rule is one: refusing to insure, refusing to continue to insure, limiting the amount, extent or kind of coverage available to an individual, or charging an individual a different rate for the same coverage solely because of blindness or partial blindness is unfair discrimination (20 CSR 100-2.200(1)). Missouri’s statute bars cancelling, refusing to insure or refusing to continue to insure solely because of the race, gender, color, creed, national origin or ancestry of anyone who is or seeks to become insured (Mo. Rev. Stat. § 375.936(11)(g)). Missouri’s statute also bars refusing or limiting coverage because of an individual’s gender or marital status, and, for property and casualty risks, refusing, cancelling or limiting coverage because of the risk’s geographic location or solely because the applicant, the insured or an employee of either is mentally or physically impaired; none of these rules, or the one before, applies to an action taken for a business purpose that is not a mere pretext for unfair discrimination, or required by law or regulatory mandate (Mo. Rev. Stat. § 375.936(11)(c), (e), (h), (i)).

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 negligence and unintentional mistakes that cause financial harm to clients. It does not cover intentional misconduct, criminal acts, or regulatory fines.

Rebating

Missouri 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

The splitting or sharing of commissions with a licensed producer is allowed. In Missouri, a commission may be paid to a duly licensed insurance producer (Mo. Rev. Stat. § 375.116.1), but not to a person for selling, soliciting or negotiating insurance the person is required to be licensed for and is not, since no one may sell, solicit or negotiate a class of insurance without a license for that line of authority (Mo. Rev. Stat. §§ 375.014.1, 375.076.1). 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. Missouri’s statute allows a commission to be paid to a business entity licensed as an insurance producer, or to a person who does not sell, solicit or negotiate insurance in Missouri, unless the payment would be a rebate the law forbids (Mo. Rev. Stat. § 375.076.4).

Twisting

In Missouri, a misrepresentation made for the purpose of inducing or tending to induce the lapse, forfeiture, exchange, conversion or surrender of a policy is an unfair practice the unfair trade practices law lists (Mo. Rev. Stat. § 375.936(6)(f)). Any written or oral statements used to induce the lapse, termination, exchange, or surrender of an insurance contract based on inaccurate information is prohibited.

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.

Unfair marketing practices

The Department of Commerce and Insurance is responsible for establishing minimum standards for the full and fair disclosure of policy content. Missouri’s advertising rule for life insurance and annuities requires advertisements to be truthful and not misleading in fact or by implication (20 CSR 400-5.100(3)(A)). Advertising may not involve the following:

Any impression that the insurer, its financial condition or status, the payment of its claims, or its policy forms are recommended or endorsed by any governmental entity, unless the entity has done so and authorizes its recommendation or endorsement to be used in an advertisement (20 CSR 400-5.100(6)(C)), or any statement or implication that an insurer or a policy has been approved or endorsed by a group of individuals, society, association or other organization, unless that is the fact and any proprietary relationship between the organization and the insurer is disclosed (20 CSR 400-5.100(4)(Q)3.).
Any untrue, deceptive or misleading statement about how quickly claims are paid (Mo. Rev. Stat. § 375.936(4)).

Gramm-Leach Bliley Act (GLBA)

This law repealed the parts of the Glass-Steagall Act of 1933 that kept commercial banks and securities firms apart, and allowed the 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(c)).

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.

In states that adopted the NAIC’s Insurance Information and Privacy Protection Model Act, an authorization to collect personal information signed with an application is valid for no more than 30 months for life, health or disability insurance and one year for property or casualty insurance.

Under the same model act, a person told of an adverse underwriting decision may ask in writing, within 90 business days of the notice, for the specific reasons for it, which must be given within 21 business days of the request.

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
Must give the caller’s name, the name of the company the call is made for, and a telephone number or address at which that company can be contacted

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 may not send commercial email to a person more than 10 business days after receiving the person’s opt-out request

Licensing requirements & pre-licensing

Must be 18+, with Missouri as principal residence or place of business (MO home-state test)
Must pass exam covering lines of authority, producer duties, MO insurance law
Failed exam: may retake after paying fees again; passed exam: 1 year to apply for license or retest
Director reviews applicant background before license issuance

Controlled business & non-resident licensing

Controlled business = insurance on the producer’s own, family or employer interests
Nonresident license granted without MO exam if: licensed/good standing in home state, request + fees, home-state or Uniform Application, home state offers reciprocity
Address change: file within 30 days; moving into new state: apply for resident license within 90 days (no retest for held lines)

Temporary licenses

Issued without exam, max 90 days in MO
Covers: surviving spouse/personal rep of deceased/disabled producer, employee of business entity producer, military designee, or public interest cases
Ends when business is disposed of; Director may require a sponsor (licensed producer or insurer)

Military service accommodations

Waiver available for renewal procedures/penalties due to military service or long-term disability
Active duty 30+ days: license renewal within 60 days of completing service, no penalty

Renewal, reinstatement & CE

MO license term: 2 years, renewed on producer’s birth date, $100 fee
Reinstatement within 12 months without exam (CE proof + $25/month penalty); after 12 months must reapply/retest
CE required to renew every MO producer license unless exempt (licenses needing no exam, exempted limited lines)

Reporting changes

Address change: report within 30 days; late penalty up to $10/month; unreported change blocking service of complaint can trigger immediate revocation
Report administrative actions within 30 days of final disposition; MO criminal reports: felony or moral turpitude prosecutions, within 30 days of initial pretrial hearing
Must notify regulator before using any assumed business name

Company authorization & capital requirements

Insurer needs certificate of authority: files charter, financials, meets capital/surplus requirements
Must maintain required capital and surplus (domestic stock: both; domestic mutual: surplus); Director may revoke/suspend a foreign insurer that fails to

Director’s duties & authority

Appointed by Governor w/ Senate consent; oversees MO Dept. of Commerce and Insurance
Duties: investigate complaints, examine insurers (every 5 years) and any company as often as deemed appropriate, collect fees, administer fines, review filed forms/rates, issue license suspension/revocation reports
Arrests by law enforcement; injunctions from circuit court on Director’s action; jail follows criminal conviction; license suspension/revocation goes to Administrative Hearing Commission

License suspension/revocation grounds

Intentionally false/incomplete application info, fraud, felony or moral turpitude conviction, misappropriation of funds, unfair trade practices, license denied/suspended/revoked in another state, identity forgery, using notes/reference material on exam

Cease and desist & hearings/penalties

Director can order cease and desist for law violations or substantial steps toward violation
Hearing process: notice + show cause order, hearing ≥10 days later; summary orders only for unlicensed selling, fraud/misrepresentation in a sale, or unauthorized insurance business while consumers are harmed; final after 30 days if no hearing requested
Civil penalties: Level 2 violations (e.g., licensing law) up to $1,000/violation, $50,000/year; Level 4 (fraud/misrepresentation) up to $10,000/violation, $250,000/year; knowing violations raise penalty tier

Unfair claims settlement practices

Violations include: unreasonable delay via duplicate proof requirements, failing to explain denial/compromise basis, refusing to pay without reasonable investigation, settling on a materially altered application, settling for less than reasonable value based on advertising material; MO: violations when in conscious disregard or a general business practice

Policy forms & records

Life/annuity forms: approved or deemed approved after 45 days; group A&H same 45-day rule; auto/home/renters forms deemed approved on submission, Director reviews within 60 days
Policy provisions conflicting with state law are read as amended, not invalidated
Producer records kept for life of policy + 3 years after

Misrepresentation, twisting, defamation

Misrepresentation: inaccurate policy terms/benefits; in MO an unfair trade practice if in conscious disregard or a general business practice
Twisting: inducing lapse/surrender via misrepresentation
Defamation: false/malicious statements about insurer’s financial condition meant to injure
False advertising: untrue/deceptive/misleading statements in any medium; NAIC model: unfair if flagrant and in conscious disregard of the law, or a general business practice

Rebating, inducements & commission sharing

Rebating: giving unauthorized value/favor as inducement to buy; MO bars this except as law expressly allows
Promotional gifts: some states allow reasonable non-cash gifts; MO names no specific allowance
Commissions paid to licensed producers; none for selling/soliciting/negotiating without the needed license; MO also allows licensed business entities and non-selling persons unless a rebate

Unfair discrimination

Prohibits differing treatment of same-risk-class individuals based on sex, marital status, race, religion, national origin
P&C: can’t deny solely for geographic location (unless actuarially justified) or physical/mental impairment
Blindness/partial blindness specifically protected in MO

E&O insurance

Professional liability coverage for negligent acts/errors by agents
Covers unintentional mistakes causing client harm; excludes intentional misconduct, crimes, regulatory fines

Federal laws affecting insurance

GLBA: repealed Glass-Steagall barriers, allows bank/securities/insurance mergers
McCarran-Ferguson Act (1945): insurance regulated at state level; limited antitrust exemption (excludes health insurance since 2021)
NAIC: standard-setting body of state insurance commissioners; creates model acts, not a regulator itself
FCRA: governs consumer reports in underwriting; investigative report disclosure within 3 days; adverse action notice gives consumer 60 days to dispute
Privacy Act of 1974: applies only to federal agencies, not private insurers
NAIC Privacy Model Act: authorization valid ≤30 months (life/health) or 1 year (property/casualty); adverse underwriting decision reasons requested within 90 days, answered within 21 days

Telemarketing & email marketing

Do Not Call Registry: calls only 8am-9pm local time, must identify caller/company/contact info
CAN-SPAM: commercial emails must be labeled as ads, accurate headers, include physical address, offer opt-out; no commercial email more than 10 business days after an opt-out request

Missouri State Regulations & NAIC Insurance Law

Licensing

Any individual applying for a Missouri resident producer’s license must:

Be at least 18 years old
Have Missouri as the state of your principal place of residence or principal place of business, the test Missouri law uses for a producer’s home state (Mo. Rev. Stat. § 375.012.2(3))

Pre-licensing course and exam

Fingerprints/background check

The Director reviews an applicant’s background before issuing a license.

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.

Non-resident license

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

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

Military service

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 Missouri producer license is issued for a term of two years and is renewed every two years on the producer’s birth date, for a renewal fee of $100 (Mo. Rev. Stat. § 375.018.1, .3).

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

Continuing education

Notice of change of name or address

Company regulations

Capital and surplus requirement

Duties of the Director of the Department of Commerce and Insurance

The Director is responsible for establishing and enforcing regulations in the Missouri 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 Director 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.
Examine the financial condition of insurers; the NAIC’s model examination law calls for every insurer to be examined at least once every five years. Missouri examines every licensed insurer at least once every five years (Mo. Rev. Stat. § 374.205.1(1)).
Examine any company, a term that reaches any person engaging in or proposing or attempting to engage in any transaction or kind of insurance business, as often as the Director in his or her sole discretion deems appropriate (Mo. Rev. Stat. §§ 374.202.2(1), 374.205.1(1)). Under the NAIC’s examination model, the regulator may examine any person subject to its authority, nonresident producers included, as often as it considers appropriate.
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.
Review the policy forms and rates insurers file, and approve those the law requires to be approved: the forms that need approval are described under Policy forms, and a property and casualty insurer’s filing of its rates and rating plans within ten days after they take effect is sufficient compliance with Missouri’s filing law, except for commercial property and commercial casualty insurance, whose filing requirements differ (Mo. Rev. Stat. § 379.321.1, .6).

Sidenote

Know this...

Suspend, revoke or non-renew

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

Intentionally providing materially incorrect, misleading, incomplete or untrue information in the license application (Mo. Rev. Stat. § 375.141.1(1)).
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. Missouri’s ground also covers a crime involving moral turpitude (Mo. Rev. Stat. § 375.141.1(6)).
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 Missouri. Under the NAIC’s model act, a license denied in another state is also a ground. So is Missouri’s: having an insurance producer license, or its equivalent, denied, suspended or revoked in any other state, province, district or territory (Mo. Rev. Stat. § 375.141.1(9)).
Using another person’s identity and forging their name on an insurance application.
Improperly using notes or any other reference material to complete an examination for an insurance license (Mo. Rev. Stat. § 375.141.1(11)).

Cease and desist

Hearing and penalties

A person facing action by the Director is entitled to notice and an opportunity for a hearing, within time limits set by Missouri law, and may ask a court to review the final order.

Unfair claims settlement practices

Unreasonably delaying the investigation or payment of claims by requiring both a formal proof of loss form and subsequent verification that would result in duplication of information and verification appearing in the formal proof of loss form.
Failing, in the case of claims denials or offers of compromise settlement, to promptly provide a reasonable and accurate explanation of the basis for such actions.
Refusing to pay claims without conducting a reasonable investigation.
Attempting to settle claims on the basis of an application which was materially altered without notice to, or knowledge or consent of, the insured (Mo. Rev. Stat. § 375.1007(9)).
Attempting to settle or settling a claim for less than the amount a reasonable person would believe the insured or beneficiary was entitled to by reference to written or printed advertising material accompanying or made part of an application.

Policy forms

Insurers file their policy forms with the Director.

In Missouri, a life insurer may lend a policyholder up to the legal reserve it must keep on the policy, on the security of the policy’s cash surrender value (Mo. Rev. Stat. § 376.306).

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 Director’s inspection.

Missouri requires a producer’s records on a personal insurance policy to be kept for as long as the policy is in force and for at least three years afterward (20 CSR 700-1.140(5)(D)).

Fraudulent producer representation

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. Under the NAIC’s model act, any estimate, illustration or statement that misrepresents a policy’s benefits, advantages, conditions or terms is an unfair trade practice when committed flagrantly and in conscious disregard of the law, or often enough to indicate a general business practice. In Missouri, such a misrepresentation is an unfair trade practice when committed in conscious disregard of the law or with such frequency as to indicate a general business practice (Mo. Rev. Stat. §§ 375.934, 375.936(6)).
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 purchase, lapse, forfeiture, exchange, conversion, or surrender of any policy is a violation as well (Mo. Rev. Stat. § 375.936(6)(f)); aimed at the lapse, forfeiture, exchange, conversion or surrender of an existing policy, it is twisting.

False advertising

Defamation

Boycott, coercion and intimidation

False financial statements

Illegal inducements

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

Errors & omissions

Rebating

Missouri 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

Twisting

Unfair marketing practices

Any impression that the insurer, its financial condition or status, the payment of its claims, or its policy forms are recommended or endorsed by any governmental entity, unless the entity has done so and authorizes its recommendation or endorsement to be used in an advertisement (20 CSR 400-5.100(6)(C)), or any statement or implication that an insurer or a policy has been approved or endorsed by a group of individuals, society, association or other organization, unless that is the fact and any proprietary relationship between the organization and the insurer is disclosed (20 CSR 400-5.100(4)(Q)3.).
Any untrue, deceptive or misleading statement about how quickly claims are paid (Mo. Rev. Stat. § 375.936(4)).

Gramm-Leach Bliley Act (GLBA)

McCarran-Ferguson Act

National Association of Insurance Commissioners (NAIC)

Fair Credit Reporting Act

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

Telemarketing

May be made only between 8 a.m. and 9 p.m. in the recipient’s local time
Must give the caller’s name, the name of the company the call is made for, and a telephone number or address at which that company can be contacted

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 may not send commercial email to a person more than 10 business days after receiving the person’s opt-out request

Missouri State Regulations & NAIC Insurance Law

Licensing

Any individual applying for a Missouri resident producer’s license must:

Be at least 18 years old
Have Missouri as the state of your principal place of residence or principal place of business, the test Missouri law uses for a producer’s home state (Mo. Rev. Stat. § 375.012.2(3))

Pre-licensing course and exam

Fingerprints/background check

The Director reviews an applicant’s background before issuing a license.

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.

Non-resident license

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

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

Military service

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 Missouri producer license is issued for a term of two years and is renewed every two years on the producer’s birth date, for a renewal fee of $100 (Mo. Rev. Stat. § 375.018.1, .3).

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

Continuing education

Notice of change of name or address

Company regulations

Capital and surplus requirement

Duties of the Director of the Department of Commerce and Insurance

The Director is responsible for establishing and enforcing regulations in the Missouri 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 Director 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.
Examine the financial condition of insurers; the NAIC’s model examination law calls for every insurer to be examined at least once every five years. Missouri examines every licensed insurer at least once every five years (Mo. Rev. Stat. § 374.205.1(1)).
Examine any company, a term that reaches any person engaging in or proposing or attempting to engage in any transaction or kind of insurance business, as often as the Director in his or her sole discretion deems appropriate (Mo. Rev. Stat. §§ 374.202.2(1), 374.205.1(1)). Under the NAIC’s examination model, the regulator may examine any person subject to its authority, nonresident producers included, as often as it considers appropriate.
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.
Review the policy forms and rates insurers file, and approve those the law requires to be approved: the forms that need approval are described under Policy forms, and a property and casualty insurer’s filing of its rates and rating plans within ten days after they take effect is sufficient compliance with Missouri’s filing law, except for commercial property and commercial casualty insurance, whose filing requirements differ (Mo. Rev. Stat. § 379.321.1, .6).

Sidenote

Know this...

Suspend, revoke or non-renew

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

Intentionally providing materially incorrect, misleading, incomplete or untrue information in the license application (Mo. Rev. Stat. § 375.141.1(1)).
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. Missouri’s ground also covers a crime involving moral turpitude (Mo. Rev. Stat. § 375.141.1(6)).
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 Missouri. Under the NAIC’s model act, a license denied in another state is also a ground. So is Missouri’s: having an insurance producer license, or its equivalent, denied, suspended or revoked in any other state, province, district or territory (Mo. Rev. Stat. § 375.141.1(9)).
Using another person’s identity and forging their name on an insurance application.
Improperly using notes or any other reference material to complete an examination for an insurance license (Mo. Rev. Stat. § 375.141.1(11)).

Cease and desist

Hearing and penalties

A person facing action by the Director is entitled to notice and an opportunity for a hearing, within time limits set by Missouri law, and may ask a court to review the final order.

Unfair claims settlement practices

Unreasonably delaying the investigation or payment of claims by requiring both a formal proof of loss form and subsequent verification that would result in duplication of information and verification appearing in the formal proof of loss form.
Failing, in the case of claims denials or offers of compromise settlement, to promptly provide a reasonable and accurate explanation of the basis for such actions.
Refusing to pay claims without conducting a reasonable investigation.
Attempting to settle claims on the basis of an application which was materially altered without notice to, or knowledge or consent of, the insured (Mo. Rev. Stat. § 375.1007(9)).
Attempting to settle or settling a claim for less than the amount a reasonable person would believe the insured or beneficiary was entitled to by reference to written or printed advertising material accompanying or made part of an application.

Policy forms

Insurers file their policy forms with the Director.

In Missouri, a life insurer may lend a policyholder up to the legal reserve it must keep on the policy, on the security of the policy’s cash surrender value (Mo. Rev. Stat. § 376.306).

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 Director’s inspection.

Missouri requires a producer’s records on a personal insurance policy to be kept for as long as the policy is in force and for at least three years afterward (20 CSR 700-1.140(5)(D)).

Fraudulent producer representation

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. Under the NAIC’s model act, any estimate, illustration or statement that misrepresents a policy’s benefits, advantages, conditions or terms is an unfair trade practice when committed flagrantly and in conscious disregard of the law, or often enough to indicate a general business practice. In Missouri, such a misrepresentation is an unfair trade practice when committed in conscious disregard of the law or with such frequency as to indicate a general business practice (Mo. Rev. Stat. §§ 375.934, 375.936(6)).
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 purchase, lapse, forfeiture, exchange, conversion, or surrender of any policy is a violation as well (Mo. Rev. Stat. § 375.936(6)(f)); aimed at the lapse, forfeiture, exchange, conversion or surrender of an existing policy, it is twisting.

False advertising

Defamation

Boycott, coercion and intimidation

False financial statements

Illegal inducements

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

Errors & omissions

Rebating

Missouri 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

Twisting

Unfair marketing practices

Any impression that the insurer, its financial condition or status, the payment of its claims, or its policy forms are recommended or endorsed by any governmental entity, unless the entity has done so and authorizes its recommendation or endorsement to be used in an advertisement (20 CSR 400-5.100(6)(C)), or any statement or implication that an insurer or a policy has been approved or endorsed by a group of individuals, society, association or other organization, unless that is the fact and any proprietary relationship between the organization and the insurer is disclosed (20 CSR 400-5.100(4)(Q)3.).
Any untrue, deceptive or misleading statement about how quickly claims are paid (Mo. Rev. Stat. § 375.936(4)).

Gramm-Leach Bliley Act (GLBA)

McCarran-Ferguson Act

National Association of Insurance Commissioners (NAIC)

Fair Credit Reporting Act

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

Telemarketing

May be made only between 8 a.m. and 9 p.m. in the recipient’s local time
Must give the caller’s name, the name of the company the call is made for, and a telephone number or address at which that company can be contacted

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 may not send commercial email to a person more than 10 business days after receiving the person’s opt-out request

Licensing requirements & pre-licensing

Must be 18+, with Missouri as principal residence or place of business (MO home-state test)
Must pass exam covering lines of authority, producer duties, MO insurance law
Failed exam: may retake after paying fees again; passed exam: 1 year to apply for license or retest
Director reviews applicant background before license issuance

Controlled business & non-resident licensing

Controlled business = insurance on the producer’s own, family or employer interests
Nonresident license granted without MO exam if: licensed/good standing in home state, request + fees, home-state or Uniform Application, home state offers reciprocity
Address change: file within 30 days; moving into new state: apply for resident license within 90 days (no retest for held lines)

Temporary licenses

Issued without exam, max 90 days in MO
Covers: surviving spouse/personal rep of deceased/disabled producer, employee of business entity producer, military designee, or public interest cases
Ends when business is disposed of; Director may require a sponsor (licensed producer or insurer)

Military service accommodations

Waiver available for renewal procedures/penalties due to military service or long-term disability
Active duty 30+ days: license renewal within 60 days of completing service, no penalty

Renewal, reinstatement & CE

MO license term: 2 years, renewed on producer’s birth date, $100 fee
Reinstatement within 12 months without exam (CE proof + $25/month penalty); after 12 months must reapply/retest
CE required to renew every MO producer license unless exempt (licenses needing no exam, exempted limited lines)

Reporting changes

Address change: report within 30 days; late penalty up to $10/month; unreported change blocking service of complaint can trigger immediate revocation
Report administrative actions within 30 days of final disposition; MO criminal reports: felony or moral turpitude prosecutions, within 30 days of initial pretrial hearing
Must notify regulator before using any assumed business name

Company authorization & capital requirements

Insurer needs certificate of authority: files charter, financials, meets capital/surplus requirements
Must maintain required capital and surplus (domestic stock: both; domestic mutual: surplus); Director may revoke/suspend a foreign insurer that fails to

Director’s duties & authority

Appointed by Governor w/ Senate consent; oversees MO Dept. of Commerce and Insurance
Duties: investigate complaints, examine insurers (every 5 years) and any company as often as deemed appropriate, collect fees, administer fines, review filed forms/rates, issue license suspension/revocation reports
Arrests by law enforcement; injunctions from circuit court on Director’s action; jail follows criminal conviction; license suspension/revocation goes to Administrative Hearing Commission

License suspension/revocation grounds

Intentionally false/incomplete application info, fraud, felony or moral turpitude conviction, misappropriation of funds, unfair trade practices, license denied/suspended/revoked in another state, identity forgery, using notes/reference material on exam

Cease and desist & hearings/penalties

Director can order cease and desist for law violations or substantial steps toward violation
Hearing process: notice + show cause order, hearing ≥10 days later; summary orders only for unlicensed selling, fraud/misrepresentation in a sale, or unauthorized insurance business while consumers are harmed; final after 30 days if no hearing requested
Civil penalties: Level 2 violations (e.g., licensing law) up to $1,000/violation, $50,000/year; Level 4 (fraud/misrepresentation) up to $10,000/violation, $250,000/year; knowing violations raise penalty tier

Unfair claims settlement practices

Violations include: unreasonable delay via duplicate proof requirements, failing to explain denial/compromise basis, refusing to pay without reasonable investigation, settling on a materially altered application, settling for less than reasonable value based on advertising material; MO: violations when in conscious disregard or a general business practice

Policy forms & records

Life/annuity forms: approved or deemed approved after 45 days; group A&H same 45-day rule; auto/home/renters forms deemed approved on submission, Director reviews within 60 days
Policy provisions conflicting with state law are read as amended, not invalidated
Producer records kept for life of policy + 3 years after

Misrepresentation, twisting, defamation

Misrepresentation: inaccurate policy terms/benefits; in MO an unfair trade practice if in conscious disregard or a general business practice
Twisting: inducing lapse/surrender via misrepresentation
Defamation: false/malicious statements about insurer’s financial condition meant to injure
False advertising: untrue/deceptive/misleading statements in any medium; NAIC model: unfair if flagrant and in conscious disregard of the law, or a general business practice

Rebating, inducements & commission sharing

Rebating: giving unauthorized value/favor as inducement to buy; MO bars this except as law expressly allows
Promotional gifts: some states allow reasonable non-cash gifts; MO names no specific allowance
Commissions paid to licensed producers; none for selling/soliciting/negotiating without the needed license; MO also allows licensed business entities and non-selling persons unless a rebate

Unfair discrimination

Prohibits differing treatment of same-risk-class individuals based on sex, marital status, race, religion, national origin
P&C: can’t deny solely for geographic location (unless actuarially justified) or physical/mental impairment
Blindness/partial blindness specifically protected in MO

E&O insurance

Professional liability coverage for negligent acts/errors by agents
Covers unintentional mistakes causing client harm; excludes intentional misconduct, crimes, regulatory fines

Federal laws affecting insurance

GLBA: repealed Glass-Steagall barriers, allows bank/securities/insurance mergers
McCarran-Ferguson Act (1945): insurance regulated at state level; limited antitrust exemption (excludes health insurance since 2021)
NAIC: standard-setting body of state insurance commissioners; creates model acts, not a regulator itself
FCRA: governs consumer reports in underwriting; investigative report disclosure within 3 days; adverse action notice gives consumer 60 days to dispute
Privacy Act of 1974: applies only to federal agencies, not private insurers
NAIC Privacy Model Act: authorization valid ≤30 months (life/health) or 1 year (property/casualty); adverse underwriting decision reasons requested within 90 days, answered within 21 days

Telemarketing & email marketing

Do Not Call Registry: calls only 8am-9pm local time, must identify caller/company/contact info
CAN-SPAM: commercial emails must be labeled as ads, accurate headers, include physical address, offer opt-out; no commercial email more than 10 business days after an opt-out request

Missouri State Regulations & NAIC Insurance Law

Licensing

Any individual applying for a Missouri resident producer’s license must:

Be at least 18 years old
Have Missouri as the state of your principal place of residence or principal place of business, the test Missouri law uses for a producer’s home state (Mo. Rev. Stat. § 375.012.2(3))

Pre-licensing course and exam

Fingerprints/background check

The Director reviews an applicant’s background before issuing a license.

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.

Non-resident license

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

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

Military service

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 Missouri producer license is issued for a term of two years and is renewed every two years on the producer’s birth date, for a renewal fee of $100 (Mo. Rev. Stat. § 375.018.1, .3).

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

Continuing education

Notice of change of name or address

Company regulations

Capital and surplus requirement

Duties of the Director of the Department of Commerce and Insurance

The Director is responsible for establishing and enforcing regulations in the Missouri 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 Director 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.
Examine the financial condition of insurers; the NAIC’s model examination law calls for every insurer to be examined at least once every five years. Missouri examines every licensed insurer at least once every five years (Mo. Rev. Stat. § 374.205.1(1)).
Examine any company, a term that reaches any person engaging in or proposing or attempting to engage in any transaction or kind of insurance business, as often as the Director in his or her sole discretion deems appropriate (Mo. Rev. Stat. §§ 374.202.2(1), 374.205.1(1)). Under the NAIC’s examination model, the regulator may examine any person subject to its authority, nonresident producers included, as often as it considers appropriate.
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.
Review the policy forms and rates insurers file, and approve those the law requires to be approved: the forms that need approval are described under Policy forms, and a property and casualty insurer’s filing of its rates and rating plans within ten days after they take effect is sufficient compliance with Missouri’s filing law, except for commercial property and commercial casualty insurance, whose filing requirements differ (Mo. Rev. Stat. § 379.321.1, .6).

Sidenote

Know this...

Suspend, revoke or non-renew

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

Intentionally providing materially incorrect, misleading, incomplete or untrue information in the license application (Mo. Rev. Stat. § 375.141.1(1)).
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. Missouri’s ground also covers a crime involving moral turpitude (Mo. Rev. Stat. § 375.141.1(6)).
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 Missouri. Under the NAIC’s model act, a license denied in another state is also a ground. So is Missouri’s: having an insurance producer license, or its equivalent, denied, suspended or revoked in any other state, province, district or territory (Mo. Rev. Stat. § 375.141.1(9)).
Using another person’s identity and forging their name on an insurance application.
Improperly using notes or any other reference material to complete an examination for an insurance license (Mo. Rev. Stat. § 375.141.1(11)).

Cease and desist

Hearing and penalties

A person facing action by the Director is entitled to notice and an opportunity for a hearing, within time limits set by Missouri law, and may ask a court to review the final order.

Unfair claims settlement practices

Unreasonably delaying the investigation or payment of claims by requiring both a formal proof of loss form and subsequent verification that would result in duplication of information and verification appearing in the formal proof of loss form.
Failing, in the case of claims denials or offers of compromise settlement, to promptly provide a reasonable and accurate explanation of the basis for such actions.
Refusing to pay claims without conducting a reasonable investigation.
Attempting to settle claims on the basis of an application which was materially altered without notice to, or knowledge or consent of, the insured (Mo. Rev. Stat. § 375.1007(9)).
Attempting to settle or settling a claim for less than the amount a reasonable person would believe the insured or beneficiary was entitled to by reference to written or printed advertising material accompanying or made part of an application.

Policy forms

Insurers file their policy forms with the Director.

In Missouri, a life insurer may lend a policyholder up to the legal reserve it must keep on the policy, on the security of the policy’s cash surrender value (Mo. Rev. Stat. § 376.306).

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 Director’s inspection.

Missouri requires a producer’s records on a personal insurance policy to be kept for as long as the policy is in force and for at least three years afterward (20 CSR 700-1.140(5)(D)).

Fraudulent producer representation

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. Under the NAIC’s model act, any estimate, illustration or statement that misrepresents a policy’s benefits, advantages, conditions or terms is an unfair trade practice when committed flagrantly and in conscious disregard of the law, or often enough to indicate a general business practice. In Missouri, such a misrepresentation is an unfair trade practice when committed in conscious disregard of the law or with such frequency as to indicate a general business practice (Mo. Rev. Stat. §§ 375.934, 375.936(6)).
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 purchase, lapse, forfeiture, exchange, conversion, or surrender of any policy is a violation as well (Mo. Rev. Stat. § 375.936(6)(f)); aimed at the lapse, forfeiture, exchange, conversion or surrender of an existing policy, it is twisting.

False advertising

Defamation

Boycott, coercion and intimidation

False financial statements

Illegal inducements

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

Errors & omissions

Rebating

Missouri 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

Twisting

Unfair marketing practices

Any impression that the insurer, its financial condition or status, the payment of its claims, or its policy forms are recommended or endorsed by any governmental entity, unless the entity has done so and authorizes its recommendation or endorsement to be used in an advertisement (20 CSR 400-5.100(6)(C)), or any statement or implication that an insurer or a policy has been approved or endorsed by a group of individuals, society, association or other organization, unless that is the fact and any proprietary relationship between the organization and the insurer is disclosed (20 CSR 400-5.100(4)(Q)3.).
Any untrue, deceptive or misleading statement about how quickly claims are paid (Mo. Rev. Stat. § 375.936(4)).

Gramm-Leach Bliley Act (GLBA)

McCarran-Ferguson Act

National Association of Insurance Commissioners (NAIC)

Fair Credit Reporting Act

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

Telemarketing

May be made only between 8 a.m. and 9 p.m. in the recipient’s local time
Must give the caller’s name, the name of the company the call is made for, and a telephone number or address at which that company can be contacted

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 may not send commercial email to a person more than 10 business days after receiving the person’s opt-out request

Licensing requirements & pre-licensing

Must be 18+, with Missouri as principal residence or place of business (MO home-state test)
Must pass exam covering lines of authority, producer duties, MO insurance law
Failed exam: may retake after paying fees again; passed exam: 1 year to apply for license or retest
Director reviews applicant background before license issuance

Controlled business & non-resident licensing

Controlled business = insurance on the producer’s own, family or employer interests
Nonresident license granted without MO exam if: licensed/good standing in home state, request + fees, home-state or Uniform Application, home state offers reciprocity
Address change: file within 30 days; moving into new state: apply for resident license within 90 days (no retest for held lines)

Temporary licenses

Issued without exam, max 90 days in MO
Covers: surviving spouse/personal rep of deceased/disabled producer, employee of business entity producer, military designee, or public interest cases
Ends when business is disposed of; Director may require a sponsor (licensed producer or insurer)

Military service accommodations

Waiver available for renewal procedures/penalties due to military service or long-term disability
Active duty 30+ days: license renewal within 60 days of completing service, no penalty

Renewal, reinstatement & CE

MO license term: 2 years, renewed on producer’s birth date, $100 fee
Reinstatement within 12 months without exam (CE proof + $25/month penalty); after 12 months must reapply/retest
CE required to renew every MO producer license unless exempt (licenses needing no exam, exempted limited lines)

Reporting changes

Address change: report within 30 days; late penalty up to $10/month; unreported change blocking service of complaint can trigger immediate revocation
Report administrative actions within 30 days of final disposition; MO criminal reports: felony or moral turpitude prosecutions, within 30 days of initial pretrial hearing
Must notify regulator before using any assumed business name

Company authorization & capital requirements

Insurer needs certificate of authority: files charter, financials, meets capital/surplus requirements
Must maintain required capital and surplus (domestic stock: both; domestic mutual: surplus); Director may revoke/suspend a foreign insurer that fails to

Director’s duties & authority

Appointed by Governor w/ Senate consent; oversees MO Dept. of Commerce and Insurance
Duties: investigate complaints, examine insurers (every 5 years) and any company as often as deemed appropriate, collect fees, administer fines, review filed forms/rates, issue license suspension/revocation reports
Arrests by law enforcement; injunctions from circuit court on Director’s action; jail follows criminal conviction; license suspension/revocation goes to Administrative Hearing Commission

License suspension/revocation grounds

Intentionally false/incomplete application info, fraud, felony or moral turpitude conviction, misappropriation of funds, unfair trade practices, license denied/suspended/revoked in another state, identity forgery, using notes/reference material on exam

Cease and desist & hearings/penalties

Director can order cease and desist for law violations or substantial steps toward violation
Hearing process: notice + show cause order, hearing ≥10 days later; summary orders only for unlicensed selling, fraud/misrepresentation in a sale, or unauthorized insurance business while consumers are harmed; final after 30 days if no hearing requested
Civil penalties: Level 2 violations (e.g., licensing law) up to $1,000/violation, $50,000/year; Level 4 (fraud/misrepresentation) up to $10,000/violation, $250,000/year; knowing violations raise penalty tier

Unfair claims settlement practices

Violations include: unreasonable delay via duplicate proof requirements, failing to explain denial/compromise basis, refusing to pay without reasonable investigation, settling on a materially altered application, settling for less than reasonable value based on advertising material; MO: violations when in conscious disregard or a general business practice

Policy forms & records

Life/annuity forms: approved or deemed approved after 45 days; group A&H same 45-day rule; auto/home/renters forms deemed approved on submission, Director reviews within 60 days
Policy provisions conflicting with state law are read as amended, not invalidated
Producer records kept for life of policy + 3 years after

Misrepresentation, twisting, defamation

Misrepresentation: inaccurate policy terms/benefits; in MO an unfair trade practice if in conscious disregard or a general business practice
Twisting: inducing lapse/surrender via misrepresentation
Defamation: false/malicious statements about insurer’s financial condition meant to injure
False advertising: untrue/deceptive/misleading statements in any medium; NAIC model: unfair if flagrant and in conscious disregard of the law, or a general business practice

Rebating, inducements & commission sharing

Rebating: giving unauthorized value/favor as inducement to buy; MO bars this except as law expressly allows
Promotional gifts: some states allow reasonable non-cash gifts; MO names no specific allowance
Commissions paid to licensed producers; none for selling/soliciting/negotiating without the needed license; MO also allows licensed business entities and non-selling persons unless a rebate

Unfair discrimination

Prohibits differing treatment of same-risk-class individuals based on sex, marital status, race, religion, national origin
P&C: can’t deny solely for geographic location (unless actuarially justified) or physical/mental impairment
Blindness/partial blindness specifically protected in MO

E&O insurance

Professional liability coverage for negligent acts/errors by agents
Covers unintentional mistakes causing client harm; excludes intentional misconduct, crimes, regulatory fines

Federal laws affecting insurance

GLBA: repealed Glass-Steagall barriers, allows bank/securities/insurance mergers
McCarran-Ferguson Act (1945): insurance regulated at state level; limited antitrust exemption (excludes health insurance since 2021)
NAIC: standard-setting body of state insurance commissioners; creates model acts, not a regulator itself
FCRA: governs consumer reports in underwriting; investigative report disclosure within 3 days; adverse action notice gives consumer 60 days to dispute
Privacy Act of 1974: applies only to federal agencies, not private insurers
NAIC Privacy Model Act: authorization valid ≤30 months (life/health) or 1 year (property/casualty); adverse underwriting decision reasons requested within 90 days, answered within 21 days

Telemarketing & email marketing

Do Not Call Registry: calls only 8am-9pm local time, must identify caller/company/contact info
CAN-SPAM: commercial emails must be labeled as ads, accurate headers, include physical address, offer opt-out; no commercial email more than 10 business days after an opt-out request