Oklahoma State Regulations & NAIC Insurance Law
Licensing
To apply for an Oklahoma resident producer’s license, you must:
- Be at least 18 years old
- Be an Oklahoma resident before you submit your application
Pre-licensing course and exam
Oklahoma does not require pre-licensing education (Oklahoma Insurance Department, Pre-License Exam Prep Providers). Before approving a resident producer license, the Commissioner must find that the applicant is at least 18, has not committed an act that is a ground for denial, has paid the fees and has passed the examinations for the lines of authority applied for (Okla. Stat. tit. 36, § 1435.7(A)).
An Oklahoma licensing exam requires 70% correct to pass, and the exams are open eligibility: a candidate may test an unlimited number of times until passing (PSI, Oklahoma Insurance Licensing Examination Candidate Information Bulletin). By statute, the passing grade is one the Commissioner determines, an applicant who fails may take the exam again with no waiver of the fee, and the license application must be made within two years after passing (Okla. Stat. tit. 36, § 1435.6(I), (J)).
Fingerprints/background check
The Commissioner 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. A producer may insure themselves and their family, but a license exists to sell insurance to the public, so states generally restrict obtaining or using a license principally to write controlled business.
Oklahoma will not grant, renew or continue a license used to write controlled business (insurance on the interests of the licensee, the licensee’s relatives to the second degree or the licensee’s employer, or covering a business in which the licensee or an immediate family member is an officer, director, substantial stockholder, partner, associate or employee). A license is treated as used for that purpose if, in any 12-month period, commissions on controlled business exceed 25% of the commissions on all business the licensee writes. The rule does not apply to title insurance producers or limited lines producers (Okla. Stat. tit. 36, § 1435.21).
Non-resident license
A producer licensed in another state can obtain an Oklahoma nonresident license without taking Oklahoma’s examination. Under the NAIC’s Producer Licensing Model Act, which most states have adopted in some form, a nonresident receives the license if the person:
- Is currently licensed as a resident, and in good standing, in the home state
- Has applied (the home-state application or the Uniform Application) and paid the fees
- Lives in a home state that grants nonresident licenses to residents of this state on the same basis (reciprocity)
Under the same model, a producer who moves to another state files a change of address, with certification from the new home state, within 30 days. A licensed producer who moves into a state applies for a resident license there within 90 days and does not repeat prelicensing education or the examination for lines already held.
Oklahoma issues a nonresident producer license to a person licensed as a resident and in good standing in the home state who has applied and paid the fees, if the home state grants nonresident licenses to Oklahoma residents on the same basis; a producer who moves from one state to another files a change of address, with certification from the new resident state, within 30 days (Okla. Stat. tit. 36, § 1435.9(A), (D)). Oklahoma’s examination is for resident applicants (Okla. Stat. tit. 36, § 1435.6(A)), so a nonresident is licensed on these conditions, reciprocity included, and not by examination. A producer licensed in another state who moves to Oklahoma applies for a resident license within 90 days of establishing legal residence, with no examination or continuing education required for the lines held in the prior state (Okla. Stat. tit. 36, § 1435.10(B)).
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.
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.
Oklahoma’s Commissioner may issue a temporary license, without an examination, for up to 180 days when one is needed to service an insurance business, and no such license is effective for more than six months; the Commissioner may renew it once, on proper application and for good cause. No temporary license is issued for any line to an applicant who has failed the required examination (Okla. Stat. tit. 36, § 1435.12(A), (E)). Oklahoma’s Commissioner may also issue one in any other circumstance in which the public interest will best be served, may by order limit the temporary licensee’s authority, and may require a suitable sponsor, a licensed producer or insurer who assumes responsibility for the temporary licensee’s acts (Okla. Stat. tit. 36, § 1435.12(A)(4), (B)).
Military service
An Oklahoma producer who cannot comply with license renewal procedures because of military service or another extenuating circumstance, such as a long-term medical disability, may request a waiver of those procedures, and of any examination requirement or other fine or sanction imposed for failing to comply with them (Okla. Stat. tit. 36, § 1435.8(D)).
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.
An Oklahoma license continues in force for no longer than 24 months, and the Commissioner may stagger renewal dates through the year by notifying licensees in writing of the expiration and renewal date assigned to them (Okla. Stat. tit. 36, § 1435.36(B)). A producer license stays in effect, unless revoked or suspended, as long as the fee is paid and a resident individual producer meets the education requirements by the due date (Okla. Stat. tit. 36, § 1435.8(B)).
A producer who misses the deadline and lets the license lapse may be able to reinstate it without retaking the examination.
An Oklahoma producer who lets a license lapse may reinstate it within 12 months of the renewal fee’s due date without passing a written examination, unless the license was revoked, suspended or refused continuation; a renewal fee received after the due date carries a penalty of double the unpaid fee, and continuing education must be kept current (Okla. Stat. tit. 36, § 1435.8(C)).
Continuing education
All states, including Oklahoma, have continuing education (CE) requirements that must be met to renew any major lines (life, health, property, liability) insurance license. Individuals licensed in the state of Oklahoma must complete continuing education before renewing their license. The number of hours required is set by state law and published by the state insurance department. In Oklahoma, each producer other than a title or aircraft title producer completes continuing education every two years, including ethics course work; a title or aircraft title producer has a requirement of its own, also including ethics; and limited lines producers and nonresident agents who have completed an equivalent or greater requirement are exempt (Okla. Stat. tit. 36, § 1435.29(A), (D)). For a producer other than a title or aircraft title producer, the requirement is at least 21 clock hours every two years plus 3 clock hours of ethics course work, 24 hours in all (Okla. Stat. tit. 36, § 1435.29(A)(1)-(2)). At least 2 of the hours must be on state or federal legislative updates, and up to 6 hours beyond the requirement carry forward to the next two-year period as general hours (Okla. Admin. Code 365:25-3-1(d)(3)-(4)).
Notice of change of name or address
An Oklahoma licensee reports a change of legal name, address or email address to the Commissioner within 30 days of the change; a change of name or address reported later must include a $50 administrative fee, and failing to give notice within 45 days of the date that fee is assessed brings penalties under the license-discipline section (Okla. Stat. tit. 36, § 1435.8(F)).
The model also requires a producer to report to the regulator within 30 days any administrative action taken against the producer in another state or by another government agency, counted from the final disposition, and any criminal prosecution in any jurisdiction, counted from the initial pretrial hearing date. A producer who does business under any name other than their legal name must notify the regulator before using it. Oklahoma’s statute has the same three rules: an administrative action taken in another jurisdiction or by another government agency in the state is reported within 30 days of its final disposition, a criminal prosecution within 30 days of the initial pretrial hearing date (Okla. Stat. tit. 36, § 1435.18(A)-(B)), and the Commissioner is notified before an assumed name is used (Okla. Stat. tit. 36, § 1435.11).
Company regulations
An insurance company must be authorized by the Insurance Department to conduct business in Oklahoma. To receive a certificate of authority, the company applies to the Commissioner and files its charter or articles of incorporation, financial statements showing that it meets the state’s capital and surplus requirements, and the other documents and fees the state requires.
Capital and surplus requirement
A company authorized to conduct insurance business in Oklahoma must maintain minimum corporate standards. The certificate of authority allows the insurer to conduct business in the state only if it maintains the minimum capital or permanent surplus required. In Oklahoma, the Commissioner must refuse to renew, revoke or suspend the certificate of an insurer that no longer meets the requirements for its authority on account of deficiency in assets or otherwise (Okla. Stat. tit. 36, § 618). For a domestic insurer whose capital or surplus is impaired by less than 20% of the required amount, the Commissioner first serves notice to make good the deficiency within 60 days (Okla. Stat. tit. 36, §§ 2101(A), 2128(A)).
Duties of the Insurance Commissioner
The Oklahoma Insurance Commissioner is an elected state executive position in the Oklahoma government. The Commissioner is the chief executive of the Oklahoma Insurance Department, which regulates insurance companies operating in Oklahoma.
The Oklahoma Insurance Commissioner is elected in even years, during midterm elections. No person may serve as the Oklahoma Insurance Commissioner for more than eight years.
The Commissioner is responsible for establishing and enforcing regulations in the Oklahoma insurance market in a manner that protects consumers and encourages economic development.
Those duties include:
-
Investigate all claims and complaints of legal violations relating to insurance.
-
If the Commissioner finds that laws have been violated, the findings and supporting documents may be referred for criminal prosecution.
-
Monitor transactions of all companies, including domestic, foreign, and alien insurance companies.
-
Audit the books and records of any resident producer as frequently as necessary. 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. In Oklahoma, the Commissioner may examine any company, a term that takes in any person subject to the Commissioner’s authority, as often as the Commissioner deems appropriate, and must examine the financial condition of every domestic and foreign insurer licensed in the state at least once every five years (Okla. Stat. tit. 36, §§ 309.1(2), 309.2(A)).
-
Collect all fees associated with producers and insurers.
-
Determine and administer fines associated with violations for insurers and producers.
-
Issue reports pertaining to the suspension and revocation of licenses of producers and certificates of authority for insurers.
-
Approve documentation used by insurance companies, such as forms and rates.
Suspend, revoke or non-renew
The Commissioner has the authority to suspend, revoke, or refuse to renew a license for:
-
Providing false information on the application for an insurance license.
-
Providing incorrect, misleading, incomplete or materially untrue information in the license application (Okla. Stat. tit. 36, § 1435.13(A)(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.
-
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 Oklahoma. Oklahoma’s ground also covers a license denied, censured or placed on probation in any other state, province, district or territory (Okla. Stat. tit. 36, § 1435.13(A)(9)).
-
Using another person’s identity and forging their name on an insurance application.
-
Being found guilty of using unethical practices or cheating on an examination for an insurance license.
Cease and desist
If the Commissioner finds that a producer has violated the state’s insurance laws, the Commissioner may order the producer to cease and desist. Receiving a cease and desist order does not automatically mean the producer’s registration has been suspended or revoked. However, the producer must stop or limit the activity addressed in the order.
Hearing and penalties
A person facing action by the Commissioner is entitled to notice and an opportunity for a hearing, within time limits set by Oklahoma law, and may ask a court to review the final order. Under Oklahoma’s unfair trade practices law the hearing comes first: the Commissioner serves a statement of the charges and a notice, and issues a cease and desist order only after a hearing or a waiver of the right to one (Okla. Stat. tit. 36, §§ 1206(A), 1207(A)). Notice of a hearing is given at least ten days in advance to everyone directly affected (Okla. Admin. Code 365:1-7-2(a)).
When Oklahoma’s Commissioner denies a license application or refuses to renew a license, the Commissioner gives the reason in writing, and the applicant or licensee may demand a hearing in writing within 30 days of the notice, before the Commissioner or an independent hearing examiner, held under the Oklahoma Administrative Procedures Act (Okla. Stat. tit. 36, § 1435.13(B)). A person ordered to cease and desist from an unfair practice may seek review in district court within 30 days of service of the order (Okla. Stat. tit. 36, § 1208(A)).
A violation of the insurance laws can bring a civil penalty in addition to action against a license. State law sets the maximum, usually per violation and often with a cap on the total, and a higher tier commonly applies to a violation that was knowing or flagrant. Some violations are also crimes.
In addition to or instead of denial, probation, censure, suspension or revocation of a license, an Oklahoma licensee may, after an opportunity for a hearing, be fined up to $1,000 for each occurrence (Okla. Stat. tit. 36, § 1435.13(D)). A person who violates a final cease and desist order issued under the unfair practices law forfeits, on proof to the court’s satisfaction, a civil penalty of $100 to $1,000 for each violation (Okla. Stat. tit. 36, § 1211). The Commissioner may also impose a penalty of up to $5,000 for each violation on any person or organization found to have violated a statute, rule, bulletin or order within the Commissioner’s jurisdiction, after notice and an opportunity for a hearing, in addition to any other penalty (Okla. Stat. tit. 36, § 322).
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. Oklahoma’s Unfair Claims Settlement Practices Act applies the same test to its own list of practices, which is worded differently from the list below (Okla. Stat. tit. 36, §§ 1250.3(B), 1250.5).
-
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.
-
Making settlement claims based on information contained on an application that has been altered without the insured’s consent is a violation of regulation.
-
Denying a claim without conducting a thorough investigation.
-
Attempting to settle 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 Commissioner.
In Oklahoma, a policy form, or an application form made part of the policy, may not be issued, delivered or used unless it is filed with and approved by the Commissioner. It is filed at least 60 days before delivery and is deemed approved when the 60 days pass unless the Commissioner approves or disapproves it first; the Commissioner may extend the period by up to 30 days (Okla. Stat. tit. 36, § 3610(A), (B)).
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 Oklahoma, a policy provision that does not comply with the insurance code does not make the policy invalid; the policy is construed and applied as if the provision complied with the code (Okla. Stat. tit. 36, § 3620).
The interest rate an insurer may charge on a life insurance policy loan is also limited by state law.
Record maintenance
A producer keeps records of each transaction (the policies placed, the insureds, the premiums received and any changes) and makes them available for the Commissioner’s inspection.
Oklahoma requires a licensee to keep the records of each transaction at the place of business, open to the Commissioner’s inspection during business hours, for the three years after the transaction is completed (Okla. Stat. tit. 36, § 1435.13(E)).
Fraudulent producer representation
In Oklahoma, a producer who represents to the public a license the producer does not hold makes an untrue, deceptive or misleading statement about the producer’s insurance business, which is an unfair practice whatever the medium (Okla. Stat. tit. 36, § 1204(2)). This includes any public communication, such as advertisements, letterheads, circulars, business cards, and other methods of representation.
A producer found guilty of conducting business in Oklahoma in any line of insurance for which they are not properly licensed may have any other insurance license suspended or revoked. Selling, soliciting or negotiating a line without a license for it is prohibited (Okla. Stat. tit. 36, § 1435.4(A)), and violating the insurance laws or committing an unfair trade practice is a ground for action against the producer’s license (Okla. Stat. tit. 36, § 1435.13(A)(2), (7)).
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.
-
Providing inaccurate or incomplete information or comparisons regarding the benefits of a policy is an example of misrepresentation.
-
Providing inaccurate or incomplete information for the purpose of inducing, or tending to induce, the lapse, exchange, conversion, forfeiture, or surrender of a policy is a violation as well (twisting). Oklahoma’s twisting clause names a misrepresentation made to a policyholder to induce, or tend to induce, a lapse, forfeiture or surrender of the insurance (Okla. Stat. tit. 36, § 1204(1)); the longer list is the NAIC model act’s.
False advertising
Making, publishing or circulating an advertisement, announcement or statement about the business of insurance that is untrue, deceptive or misleading is an unfair trade practice under state law, based on the NAIC’s model act. The medium does not matter: the rule reaches newspapers, magazines, radio and television, and also notices, circulars, pamphlets, letters, posters and any other way of placing the statement before the public. 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. Spreading an untrue rumor that a competing insurer is about to fail is the classic example.
Boycott, coercion and intimidation
Entering into an agreement to commit, or by concerted action committing, any act of boycott, coercion or intimidation that results or tends to result in unreasonable restraint of, or monopoly in, the business of insurance is prohibited under Oklahoma’s unfair practices law (Okla. Stat. tit. 36, § 1204(4)).
False financial statements
In Oklahoma, filing with a public official, or publishing or circulating, a false statement of an insurer’s financial condition with intent to deceive is an unfair practice (Okla. Stat. tit. 36, § 1204(5)), and so is knowingly or willfully making a false or fraudulent statement or representation in or relative to an application for insurance (Okla. Stat. tit. 36, § 1204(12)).
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.
Oklahoma prohibits paying, allowing or giving, directly or indirectly, as an inducement to any contract of insurance, any rebate of premiums or any valuable consideration or inducement not specified in the contract, except as otherwise expressly provided by law or in accordance with a rate filing, rating plan or rating system filed with and approved by the Commissioner; receiving or accepting such a rebate is prohibited too (Okla. Stat. tit. 36, § 1204(8)(a)). Among the practices the law does not treat as rebates are paying commissions to licensed agents and returning dividends, savings or unabsorbed premium deposits to participating policyholders (Okla. Stat. tit. 36, § 1204(8)(b)).
Oklahoma bars an insurer, agent, broker, solicitor or other person from giving or offering, as an inducement to insurance or in connection with an insurance transaction, prizes, goods, merchandise or tangible property of an aggregate value above $100 (Okla. Stat. tit. 36, § 1204(10)(d)).
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.
Oklahoma’s own unfair discrimination provision covers individuals of the same class and equal expectation of life in life insurance and annuities, individuals of the same class and essentially the same hazard in accident and health insurance, and, in other lines, insureds or subjects of insurance with substantially like insuring, risk and exposure factors (Okla. Stat. tit. 36, § 1204(7)). Separately, insurers must make every kind of coverage they write in Oklahoma available to all Oklahoma residents without regard to geographic location, subject to their underwriting standards (Okla. Stat. tit. 36, § 619.1).
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
Oklahoma licensed producers are prohibited from directly or indirectly giving any refund, discount, favor, or credit to reduce premiums to induce the purchase of insurance.
Sharing commission
The splitting or sharing of commissions with a licensed producer is allowed. In Oklahoma, a person who sells, solicits or negotiates insurance must be licensed for that line of authority, and no commission may be paid to or accepted by a person for selling, soliciting or negotiating insurance who is required to be licensed and is not (Okla. Stat. tit. 36, §§ 1435.4(A), 1435.14(A)-(B)). A commission may also be paid to an insurance agency or to a person who does not sell, solicit or negotiate insurance, unless the payment would violate the unfair practices section (Okla. Stat. tit. 36, §§ 1204, 1435.14(D)).
Twisting
Providing false information or expressing derogatory ideas about the financial conditions of a competitor company with the intent to lapse or surrender an existing policy is a violation of the law. 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. In Oklahoma, twisting is making any misrepresentation to a policyholder insured in any company for the purpose of inducing, or tending to induce, the policyholder to lapse, forfeit or surrender the insurance (Okla. Stat. tit. 36, § 1204(1)), whether or not the misrepresentation concerns a competitor’s finances.
Unfair marketing practices
The Insurance Department is responsible for establishing minimum standards for the full and fair disclosure of policy content. It also requires the standardization and simplification of the terms used to describe insurance coverage. Advertising may not involve the following:
-
Any statement or implication that policies are approved, or that the financial condition of a company is endorsed, by any government agency or by any independent group, individual, organization or society, unless that is the fact.
-
Any statements regarding advertising that are false or untrue in reference to the time frame in which claims are paid.
In Oklahoma, life insurance advertisements must be truthful and not misleading in fact or by implication (Okla. Admin. Code 365:10-3-32(a)). A life advertisement may not create the impression that the insurer, its financial condition or status, the payment of its claims or the merits of its policy forms are recommended or endorsed by any governmental entity; where an entity has recommended or endorsed a policy form or plan, that may be stated only if the entity authorizes its use in an advertisement (365:10-3-35(c)). An untrue, deceptive or misleading statement in any advertisement is an unfair practice (Okla. Stat. tit. 36, § 1204(2)).
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 for 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.
Under Oklahoma’s insurance privacy rule, an authorization to disclose a consumer’s nonpublic personal health information must state how long it remains valid, which may be no more than 24 months, and that the consumer may revoke it at any time (Okla. Admin. Code 365:35-1-41).
Under the NAIC’s Insurance Information and Privacy Protection 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
These are the federal rules (47 C.F.R. § 64.1200(c), (d)). Oklahoma’s Telephone Solicitation Act bars commercial telephone solicitation calls before 8 a.m. or after 8 p.m., but it exempts licensed insurance agents soliciting within the scope of their license and insurers subject to state supervision (Okla. Stat. tit. 15, §§ 775C.4(A)(1), 775C.5(7)-(8)).
CAN-SPAM
A commercial email must:
- Be identified clearly as an advertisement
- Carry accurate header information and a subject line that is not deceptive
- Include the sender’s valid physical postal address
- Offer a way to opt out, and the sender must honor an opt-out within 10 business days