Missouri's insurance law is in Chapters 374–385 of the Revised Statutes of Missouri (RSMo), with details in the Department's regulations at Title 20 of the Code of State Regulations (20 CSR). Chapter 374 covers the Department and enforcement. Chapter 375 covers producers, unfair practices and fraud. Chapter 376 covers life and health. Chapter 379 covers property, casualty and auto. The Missouri questions on every exam come from the same core: the Director, licensing, the insurer's register of appointed producers, CE, fiduciary money, unfair trade and claims practices, fraud and the guaranty associations. This guide covers those rules with citations. General concepts are in the national Insurance Regulation guide.

About the exam

Missouri's licensing exams are delivered by Pearson VUE. They're scored on a scaled score of 70 to pass. Each exam has a general section and a Missouri section.

After passing, you have 1 year from the exam date to apply. After that, you must retest (20 CSR 700-1.010).

The regulator

• The Department of Commerce and Insurance (DCI) is headed by the Director.
  • The Director is appointed by the Governor with the Senate's advice and consent, serves with the Governor, and may be removed at the Governor's pleasure (RSMo 374.020).
  • The Director and deputy may have no interest in an insurer except as a policyholder.
• Rules: the Director adopts rules. Notice of a rulemaking hearing goes out at least 15 days ahead (374.045).
• Examinations: every licensed insurer gets a financial exam at least once every 5 years, at the insurer's expense (374.205, 374.110).
• Subpoenas: the Director may subpoena witnesses and records. A court may impose a civil penalty up to $50,000 per violation for noncompliance (374.190, 374.210).
• Orders (374.046):
  • The Director may issue cease and desist and curative orders, and order penalties and costs.
  • A summary order may issue immediately for unlicensed activity or sales fraud.
  • It becomes final if no hearing is requested within 30 days.
  • Show-cause hearings are set at least 10 days after service.
• Penalty levels (374.049):
  • Level one carries no penalty.
  • Level two carries up to $1,000 per violation and $50,000 a year. Unfair trade practices are level two violations (375.942).
  • Knowing violations move up one or two levels. Self-reported violations found through a compliance program move down up to two levels.
  • Unpaid penalties may be collected by civil action after 10 days (374.280).
• Records of minor discipline (forfeitures of $200 or less) are expunged after 5 years (374.285).
• Missouri belongs to the Interstate Insurance Product Regulation Compact. The Director is the state's representative (374.350–374.351).

Insurers

• Domestic = organized in Missouri. Foreign = another state. Alien = another country (375.158).
• An insurer needs a certificate of authority. It's renewed annually as of July 1 (375.161, 375.786). Surplus lines and reinsurance are excepted.
• Surplus lines (chapter 384):
  • A separate surplus lines license is available only to P&C producers who pass a qualifying exam.
  • It's needed only when Missouri is the insured's home state.
  • It runs 2 years, renewing on the licensee's birth date.

Producer licensing (Chapter 375)

Who needs a license

• No one may sell, solicit or negotiate insurance without a license for that line (375.014).
• The license itself gives no authority to represent an insurer (375.012).
• Quoting rates, advising on coverage and signing binders count as licensed activity. Scheduling appointments for a producer doesn't (20 CSR 700-1.020).
• Exempt: employees who receive no commission and whose work is underwriting, loss control, inspection or claims.

Lines (375.018): life, accident and health, property, casualty, variable life and variable annuity, personal lines, and others.

Getting licensed

• Applicants must be at least 18 (375.015).
• An application is deemed approved after 25 working days without action, unless the applicant disclosed a felony or crime of moral turpitude.
• Business entities name a responsible licensed producer and report changes within 20 working days.
• Nonresidents are licensed reciprocally (375.017). A nonresident who moves reports within 30 days.
• Moving to Missouri: apply within 90 days and no exam is needed for lines already held (375.016). The exam is also waived for someone licensed elsewhere, or applying within 90 days of that license's cancellation.
• Temporary license: up to 90 days, no exam. It can go to a surviving spouse or representative of a deceased or disabled producer, or to the designee of a producer entering military service. A sponsor may be required (375.025).

Renewal and CE

• Licenses are issued for 2 years and renew biennially on the producer's birth date (375.018).
• Late reinstatement within 12 months needs no exam, but requires CE proof, back fees and a $25 per month penalty.
• Report an address change within 30 days (375.018, 375.141). Failing to do so can bring a forfeiture of up to $10 a month. If it prevents service of a complaint, the license can be revoked immediately.
• CE (375.020; 20 CSR 700-3.200):
  • 16 hours every two years. This includes 3 hours on ethics, Missouri law and producer duties.
  • Excess hours carry forward to the next two-year period.
  • Extensions of up to 1 year are allowed for good cause (serious illness, military duty, living abroad, age 70+).
  • Up to 4 hours per biennium can come from qualifying association participation, but not ethics hours (375.029).
  • A credit hour is 50 minutes. Self-study requires passing a closed-book exam. No repeat credit in the same period.
  • Producers limited to $20,000 or smaller funeral or burial policies are exempt.

Discipline (375.141)

• Grounds include false application information, misappropriating money, signing another's name without authority, using notes on the exam, ignoring a child support order and fraud.
• The Director gives written notice of the reason for a denial or nonrenewal.
• Report another jurisdiction's administrative action within 30 days of final disposition.
• Report a felony or moral-turpitude prosecution within 30 days of the initial pretrial hearing.

Appointments: the insurer's register (375.022)

• A producer may not act for an insurer unless listed on the insurer's register of appointed producers.
  • The insurer adds the producer within 30 days of authorizing him or her.
  • No fee is charged to add or remove a producer.
• Appointment happens at the earliest of several acts, such as accepting an application from the producer for underwriting (20 CSR 700-1.130).
• Termination: the insurer updates the register within 30 days. Only a for-cause termination (a reason listed in 375.141) requires notice of the reason to the Director within 30 days, with supporting documents.

Commissions and fees

• No commission may be paid to an unlicensed person who needs a license, or to anyone whose license is suspended or revoked (375.076). Renewal commissions may go to someone licensed at the time of sale.
• Compensation from the insured beyond commission needs a written agreement stating the amount (375.116).
• Incidental fees (installment, late payment, reinstatement) must be disclosed in writing (375.052).
• Retrospective commission contracts are banned, though some profit sharing is allowed (20 CSR 700-1.060).

Fiduciary money and producer conduct

Fiduciary duty

• Producers hold premiums in a fiduciary capacity (375.051).
• Missouri does not require a separate account for each payor, as long as the funds can be reasonably identified from the records.

Deadlines (20 CSR 700-1.140)

Receipts and records

• Premium receipts are labeled "Receipt" or "Premium Receipt."
• Records are kept while the policy is in force and 3 years after.

Prohibited conduct

• A producer or family member may not become a beneficiary or owner of a client's policy, or borrow from a client, without an insurable-interest relationship or a lending business.
• Using a nonexistent or self-conferred senior designation is dishonest. Missouri defines "senior" as 60 or older.

Offices and websites

• Each place of business must be the principal office of a licensed producer.
• Websites must show an address, a phone number and the states where the producer is licensed (20 CSR 700-1.025).

Unfair trade practices (375.934, 375.936)

• An act is an unfair trade practice if done in conscious disregard of the law or often enough to be a general business practice.
• Listed practices (375.936):
  • boycott, coercion and intimidation (1)
  • defamation (2)
  • false advertising (4)
  • misrepresentation, including inducing a lapse or replacement by misrepresentation (twisting) or an intentional premium misquote (6)
  • false statements on applications (7)
  • rebating (9)
  • unfair discrimination (11)
• Complaint records are kept 3 years (375.936(3)).
• Financial planner titles: a producer may not claim to be a financial planner or adviser when he or she only sells policies. A paid advisory engagement needs a signed advance agreement, kept 3 years (375.936(12)).
• Rebating exceptions:
  • Group rate readjustments.
  • Loss-mitigation products and services (379.402).
  • Promotional items carrying advertising.
  • Commercial P&C is exempt from the rebating ban, except for commission reductions not in rate filings (379.404).
• Discrimination:
  • An insurer may not refuse, cancel or nonrenew solely because another insurer did, or ask about it (375.007).
  • Coverage can't turn solely on sex or marital status (375.995).
  • Residential property can't be refused because of its age or its geographic location (375.936(11)).

Claims (Unfair Claims Settlement Practices Act, 375.1000–375.1007; 20 CSR 100-1)

• Improper practices include:
  • refusing claims without reasonable investigation
  • lowballing to force suits
  • not giving claim forms within 15 calendar days
  • not stating which coverage a payment is under
• The Act creates no private cause of action. It doesn't apply to workers' comp, fidelity, surety or boiler and machinery.

Regulation deadlines

• Notice to any agent of the insurer counts as notice to the insurer.
• Denials must be in writing and cite the specific provision.

Fraud (375.991, 375.993)

• A fraudulent insurance act is knowingly presenting materially false information, or concealing material facts, in an application or claim. Upcoding is listed.
• A first offense is a class E felony, and a repeat offense a class D felony. Restitution is ordered.
• Good-faith reporters are immune from civil liability (375.993).

Guaranty associations

Using guaranty association protection as a reason to buy is an unfair practice (375.779, 376.755).

Common exam traps

• Missouri CE is 16 hours every two years, not 24. That includes 3 hours of ethics, law and producer duties.
• Licenses renew every 2 years on the producer's birth date.
• Insurers keep a register of appointed producers. A reason is reported only for for-cause terminations.
• Temporary license: 90 days.
• Premium may stay in one account if the funds are reasonably ascertainable. Remit within 30 days.
• Claim forms: 15 days. Acknowledgment: 10 working days. Decision: 15 working days.