Transacting Business as an Insurance Producer

PURPOSE: This rule effectuates and aids in the interpretation of the definition of insurance producer as stated in section 375.012, RSMo by describing without limitation by enumeration activities for which licensure is required. (1) Solicitation of an Insurance Contract. (A) Unless otherwise specifically provided by section 375.012, RSMo, no person shall solicit an insurance contract in Missouri unless s/he is a licensed insurance company, its employee or an insurance producer. (B) Solicitation of an insurance contract includes, but is not limited to, the following activities: 1. Disseminating information as to rates secured by reference to a published or printed list or computer database of standard rates; 2. Initiating sales over the telephone other than scheduling appointments with insurance producers to discuss insurance; 3. Advising an insured to purchase additional insurance when receiving payment for existing business; 4. Signing an application or an order for insurance; and 5. Advising a prospective purchaser on the terms of existing coverage. (C) Solicitation of an insurance contract does not include the following activities: 1. Dispensing brochures and other general information so long as there is no conversation relating to the terms of an insurance contract; 2. Disseminating buyer’s guides, applications for coverage, coverage selection forms, or other similar forms in response to a request from prospective or current policyholders so long as there is no conversation relating to the terms of an insurance contract; 3. Receiving and recording information from a policyholder to give to an insurance producer for his or her review and response; or 4. Scheduling appointments with insurance producers to discuss insurance. (2) Negotiation of an Insurance Contract. (A) Unless otherwise specifically provided by section 375.012, RSMo, no person shall negotiate an insurance contract between an insured and a third party in Missouri unless s/he is a licensed insurance company, its employee or an insurance producer. (B) Negotiation of an insurance contract includes, but is not limited to, the following activities: 1. Advising a prospective purchaser on the premium cost of a proposed contract of insurance, including the quoting of rates; 2. Advising a prospective purchaser on the coverages or terms of a proposed contract of insurance, including counseling as to which coverages to buy; 3. Recommending or independently initiating additions or deletions to an insured’s policy; 4. Explaining the effect of age, health, or other risk-related conditions with respect to purchasing a particular policy; 5. Counseling, urging, or advising any prospective purchaser to buy a particular policy or to insure with a particular company; or 6. Explaining, discussing, or interpreting coverage, analyzing exposures or policies, or giving opinions or recommendations as to coverage. (C) Negotiation of an insurance contract does not include communicating with the policyholder or prospective policyholder in order to obtain factual information necessary for an insurance producer to complete a review. (3) Sale of an Insurance Contract. (A) Unless otherwise specifically provided by section 375.012, RSMo, no person shall sell an insurance contract in Missouri unless s/he is a licensed insurance company, its employee or an insurance producer. (B) Sale of an insurance contract includes, but is not limited to, the following activities: 1. Signing binders, certificates of insurance, commitments, endorsements, insurance identification cards and insurance policies; 2. Indicating that the requested coverage is or will be bound or issued; or 3. Issuing certificates of insurance, endorsements, binders, commitments, insurance policies or insurance identification cards except when done by a group policyholder. (C) Sale of an insurance contract does not include the following activities: 1. Receiving requests for coverage for transmittal to a licensed insurance producer or for processing through an automated system developed and maintained under the supervision of an insurer or licensed insurance producer; 2. Receiving and recording information from an applicant or policyholder and preparing an application for insurance pursuant to instructions from and for the review of an insurance producer; 3. Obtaining underwriting information from credit agencies, the Department of Revenue, and other insurance agencies and companies; 4. Receiving and recording information from an applicant or policyholder and preparing an application for an insurance producer’s review and signature, all binders, certificates, endorsements, identification cards, or policies pursuant to instructions from the insurance producer; or 5. Receiving premiums at the recorded place of business where the payment is being made on a binder, endorsement, or existing policy. (4) Duty to Have Insurance Producer at Each Place of Business. (A) Each place of business of an insurance producer must contain the principal office of at least one (1) licensed insurance producer. (B) A licensed insurance producer may be found to be materially aiding any acts in violation of law engaged in by an unlicensed individual under the supervision of that insurance producer. AUTHORITY: section 374.045, RSMo 2000 and section 375.012, RSMo Supp. 2007.* This rule was previously filed as 4 CSR 19012.025. Original rule filed Dec. 1, 1989, effective June 30, 1990. Amended: Filed July 12, 2002, effective Jan. 30, 2003. Amended: Filed Nov. 30, 2007, effective July 30, 2008. *Original authority: 374.045, RSMo 1967, amended 1993, 1995 and 375.012, RSMo 1961, amended 1965, 1967, 1981, 1993, 1997, 2001, 2007.