Producer Licensing & Conduct
Overview & Purpose
Chapter 12 of the Michigan Insurance Code governs who must be licensed as an insurance producer in Michigan, what qualifications are required, and what standards of conduct must be maintained throughout a producer’s career. This chapter applies equally to property and casualty producers and to life and health producers.
Who Needs a License
Any person who sells, solicits, or negotiates insurance in Michigan must hold a valid producer license issued by the Director of the Department of Insurance and Financial Services (DIFS). The law defines “negotiate” broadly — even advising a prospective buyer on coverage terms or conditions triggers the licensing requirement.
Certain individuals are exempt, including salaried employees of insurers who perform only clerical, administrative, or underwriting functions and do not receive commissions, as well as adjusters and special agents who provide only technical assistance to licensed producers.
Key Distinction: A person who merely hands out applications without explaining coverage is not required to have a license. But the moment they answer questions about coverage or recommend a policy, they are engaging in solicitation and must be licensed.
License Types and Lines of Authority
A producer license is issued for specific lines of authority. A licensee may hold authority in one or more of the following lines:
- Life
- Accident & Health or Sickness
- Property
- Casualty
- Personal Lines
- Variable Life & Variable Annuity
- Limited lines (credit, travel, title insurance)
Holding a license in one line does not automatically authorize a producer to transact business in another.
Pre-Licensing Education Requirements
Before a resident individual may sit for the licensing examination, they must complete a registered pre-licensing program of study. Minimum instructional hours by program type:
- Property: 20 hours
- Casualty: 20 hours
- Life: 20 hours
- Accident & Health: 20 hours
- Combined Life & A/H: 40 hours
Appointment and Termination
Once licensed, a producer must be appointed by the insurer(s) on whose behalf they transact business before they may legally bind coverage. Insurers must file appointment and termination notices with DIFS within 30 days.
When an insurer terminates a producer for cause — including fraud, dishonesty, or violation of insurance laws — the insurer is required to report the grounds to the Director. Producers have the right to request a hearing to contest such a report.
License Maintenance and Continuing Education
Producer licenses must be renewed every two years. Renewal requires:
- Completion of approved continuing education each 2-year cycle, part of which must be in insurance ethics
- The number of hours required is set by state law and published by the state insurance department.
- Hours may be completed through classroom instruction, home study, or approved online training
Producers who fail to meet CE requirements before their review date enter a 90-day grace period, during which they may service existing policies but may not sell, solicit, or bind new coverage. Failure to cure the deficiency within the grace period results in license cancellation.
Grounds for Denial, Suspension, or Revocation
The Director may deny, suspend, revoke, or refuse to renew a license for causes including:
- Providing false information on a license application
- Violating any insurance law or rule
- Obtaining a fee through misrepresentation
- Misappropriating client premiums
- Being convicted of a felony
- Engaging in fraudulent or dishonest practices
- Having a license revoked in another state
- Willfully over-insuring any property