New restrictions may include business names, CE credits, updated renewal deadlines, and more
The Ohio Department of Insurance has introduced significant revisions to its licensing rules for insurance agents and business entities. These changes aim to tighten regulations regarding naming practices, license renewals, and agent appointments.
Using a legal name as registered with the Ohio Secretary of State must be used when applying for Ohio licensure as proposed rule 3901-5-099(7). Rejecting names that are too similar to those of existing businesses or those names that could mislead the public, the superintendent of insurance has the authority to reject them to prevent consumer confusion.
The proposal gave specific requirements for non-resident insurance business entities that are based outside Ohio, these are businesses that are seeking a license to operate within the state. The following are the requirements;
- 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
Though registration with the Ohio Secretary of State is not mandatory for licensure, all non-resident firms may need to register separately to conduct business depending on their operations.
Also, the rule requires non-resident entities to designate at least one Ohio-licensed insurance agent ensuring compliance with state insurance laws. Those who fail to maintain this oversight will be subject to license revocation.
The proposed rule also standardizes license renewal deadlines:
- Individual agents must renew every two years by the last day of their birth month.
- Resident business entities would renew by September 30 of even-numbered years
- Non-resident business entities would renew in odd-numbered years.
- Surety bail bond agents would renew annually by April 1.
The regulation establishes continuing education (C.E) requirements based on the license type:
- Major line agents must complete 24 credits per renewal cycle, including three ethics credits.
- Title agents must complete 12 credits with at least 10 focusing on title-specific topics.
- Surety bail bond agents must complete seven credits; however, first-year licenses are exempted.
Agents who renew late will incur additional fees, although waivers will be available for those facing special circumstances, such as military service or medical disabilities.
The rule requires insurers to electronically report all agent appointments and terminations within 30 days. Appointments will automatically renew each July unless terminated, and insurers must disclose detailed reasons for terminations related to regulatory violations.
Agents temporarily leaving the industry can request inactive status, which will exempt them from continuing education requirements. However, agents who reactivate their license after two years must complete new education credits or pre-licensing courses and pay reactivation fees.
Agents may voluntarily surrender their licenses unless under investigation. Surrendering a license will void all related appointments, and re-entering the profession will require meeting all new applicant requirements.
Finally, the rule clarifies commission and compensation practices. Commissions must be paid to licensed agents under their legal or registered trade names. Agents can assign commissions to unlicensed entities through formal agreements, but these arrangements cannot facilitate unlawful commission-splitting or prohibited lead fees.
Public hearings on the proposed rule are expected in the coming months. State officials emphasize that these changes are designed to enhance consumer protection while simplifying regulatory compliance for insurers and agents alike.
