Ohio Proposes Stricter Licensing Rules for Insurance Agents and Businesses
The Ohio Department of Insurance has introduced comprehensive revisions to its licensing rules for insurance agents and business entities. These changes encompass stricter regulations on business names, license renewals, and agent appointments. The proposed rule aims to enhance consumer protections while also streamlining the regulatory process for insurers and agents.
Under the proposed rule 3901-5-099(7), business entities applying for an Ohio license must use their legal name as registered with the Ohio Secretary of State. The Superintendent of Insurance will have the authority to reject names deemed too similar to existing businesses or those that could potentially mislead the public.
The revisions also outline conditions for non-resident insurance business entities (firms based outside Ohio) seeking licenses to operate within the state:
- Submit a completed application.
- Comply with Section 3905.07 of the Ohio Revised Code.
- Pay all applicable fees.
- Provide any additional documents requested by regulators.
Compliance with Ohio’s Secretary of State registration is not mandatory for licensure. However, non-resident firms may still need to register separately to conduct business depending on their operations. Furthermore, the rule mandates that all non-resident entities designate at least one Ohio-licensed insurance agent to oversee compliance with state insurance laws.
The proposed rule standardizes license renewal deadlines as follows:
- Individual agents: Renew every two years, by the last day of their birth month.
- Resident business entities: Renew by September 30 of even-numbered years.
- Non-resident business entities: Renew in odd-numbered years.
- Surety bail bond agents: Renew annually by April 1.
Continuing education (CE) requirements are also specified based on license type:
- Major line agents: 24 credits, including three ethics credits, per cycle.
- Title agents: 12 credits, 10 of which must be title-specific.
- Surety bail bond agents: Seven credits, with exemptions for first-year licensees.
Late renewals will incur additional fees. Waivers are available for military service, medical disabilities, or other special circumstances. Additionally, the rule mandates that insurers electronically report all agent appointments and terminations within 30 days. Appointments will automatically renew each July unless terminated.
Insurers must also disclose detailed reasons for terminations related to regulatory violations. Agents leaving the industry temporarily can request inactive status, exempting them from continuing education requirements. However, agents reactivating after two years will need to complete new education credits or pre-licensing courses and pay reactivation fees.
Agents may voluntarily surrender their licenses unless under investigation. Surrendered licenses void all related appointments; agents seeking to re-enter the profession must meet all requirements for new applicants.
Finally, the rule clarifies how commissions and compensation are distributed. Commissions must be paid to licensed agents under their legal or registered trade names. Agents can assign commissions to unlicensed entities through formal agreements, provided the arrangement does not facilitate unlawful commission-splitting or lead fees.
Public hearings on the rule are scheduled in the coming months. State officials indicate that the changes aim to enhance consumer protection and simplify regulatory compliance for insurers and agents.
