Individual and Dealership Requirement of Limited Line Licenses for Optional Vehicle Related Insurance Products

THE GREAT SEAL OF THE STATE OF UTAH 1896 State of Utah GARY R. HERBERT Governor GREG BELL Lieutenant Governor TODD E. KISER Commissioner Insurance Department ## Bulletin 2013-3 TO: All Vehicle Dealerships FROM: Todd E. Kiser, Utah Insurance Commissioner DATE: March 8, 2013 SUBJECT: Individual and Dealership Requirement of Limited Line Licenses for Optional Vehicle Related Insurance Products The Utah Insurance Department (Department) has received complaints that relate to vehicle dealerships. The complaints concern licensure of individuals and/or dealerships, use of pressure tactics, tying of various insurance products to the sale or lease of a vehicle, and the use of unfiled insurance products. All are a violation of the Utah Insurance Code. Utah Code Annotated (U.C.A.) 31A-23a-103 states that a person may not perform, offer to perform, or advertise insurance products as a limited lines producer without a valid individual and agency license. In addition to the sales and leasing of vehicles, dealerships offer a variety of optional products in conjunction with the sale of the vehicle. Many of the products offered at the time of the vehicle purchase or lease are considered insurance products or contain an insurance component. These are regulated by the Department. Based upon the product offered, a dealership, as well as their finance person, may be required to be licensed with the Department before offering these products. There must be an insurance licensed individual involved with every sale of an insurance product sold by the dealership. The following products require an insurance limited lines license with the credit line of authority for both the dealership and the finance person before they can be offered: | Credit Line of Authority Products | Dealership (Agency License) | Finance Personnel (Individual License) | | --- | --- | --- | | GAP | Yes | Yes | | Credit life | Yes | Yes | | Credit Disability | Yes | Yes | | Credit Involuntary Unemployment Coverage | Yes | Yes | NOTE: A limited lines license is not required to sell Service Contracts. A limited lines license with a Motor Club line of authority is required before a Motor Club Benefit is offered. While this is not an all-inclusive list of possible insurance products being offered at the time of a vehicle purchase, we remind dealers that they must comply with the license requirements of State Office Building Suite 3110, Salt Lake City, UT 84114-6901 • (801) 538-3800 • Facsimile (801) 538-3829 • www.insurance.utah.gov U.C.A. 31A-23a-103. It is also the responsibility of the dealership to verify that companies or vendors of insurance products are licensed with the Department. To do this, go to the Department's website https://insurance.utah.gov/ and click on "Look up a company, agency, or individual agent." It is also the dealership's responsibility to verify insurance products they offer are filed with the Department. Questions related to filed forms can be directed to prop-cas.uid@utah.gov. To learn about the licensing process go to the Department's website at https://insurance.utah.gov/agent/producers/exam/index.php. When you are ready to apply for the agency license and the limited lines license, go to https://www.sircon.com/ComplianceExpress/LicenseApplications/index.jsp?1=0&lid=lp_utah0&sc=aalwhncj&sscrbid=9007&path=utah. If you have any questions about the licensing contact the Department's Producer Licensing Division at 801-538-3855 or licensing.uid@utah.gov. The Department will continue to respond to and investigate complaints. In the near future the Department will visit dealerships throughout the State to verify licenses, insurance products being sold and sales practices. If you have any questions related to this Bulletin, please contact Suzette Green-Wright, Market Conduct Director, by phone at 801-538-9674 or by email at sgreenwright@utah.gov. Todd E. Kiser Insurance Commissioner