Montana's insurance law is Title 33 of the Montana Code Annotated (MCA). The Commissioner's rules are in Title 6, chapter 6 of the Administrative Rules of Montana (ARM). Montana's exams carry a large state-law share (roughly 40% of scored items), so the details below are worth real study time. General regulatory concepts such as the NAIC models, federal law and the classic unfair trade practices are in the national Insurance Regulation guide. This guide covers Montana's own rules, with citations.

About the exam

Montana's producer exams are given by Pearson VUE. Each exam has two separately timed parts: a general part and a Montana part.

• Each part also carries 5 unscored pretest items.
• The passing score is a scaled 75, higher than the 70 used in many states.
• A candidate who fails must retake the entire exam, both parts, even if one part was passed.
• No combined exams. Life and disability are separate exams, and so are property and casualty.
• There is no Personal Lines exam in Montana. Candidates for auto and homeowners business take the property and/or casualty exams.
• The exam must have been passed within 12 months before applying for the license (33-17-211). After passing, residents apply through NIPR and send fingerprints and the fee to the Montana Criminal Records Division. The commissioner forwards fingerprints to the Montana Department of Justice, which may exchange them with the FBI (33-17-220).

The regulator

• Montana's State Auditor, elected statewide, is ex officio commissioner of insurance (Mont. Code Ann. 2-15-1903). The same official is securities commissioner, so the office is called the Commissioner of Securities and Insurance (CSI). This is Montana's signature exam fact: the regulator is elected, not appointed.
• The commissioner must administer the department so that the interests of insurance consumers are protected (33-1-311). The department is designated a criminal justice agency.
• The commissioner may adopt reasonable rules that aid in administering the code (33-1-313). The commissioner may delegate powers to deputies but stays responsible for their official acts (33-1-304).
• The commissioner and department staff may have no financial interest in an insurer or insurance transaction, except as a policyholder or claimant (33-1-305).
• Examinations. Every authorized insurer is examined at least once every 5 years, and every insurer applying for an initial certificate of authority is examined too (33-1-401).
• Hearings. A written hearing demand that isn't granted within 30 days is treated as refused (33-1-701). Hearings follow the Montana Administrative Procedure Act.
• Statute of limitations. An administrative action must be brought within 2 years of the violation or its discovery, and never more than 5 years after the violation (33-1-707).
• Workers' compensation claims are administered by the Department of Labor and Industry, not the CSI (39-71-116).

Insurer types (33-1-201): domestic (incorporated in Montana), foreign (formed in another U.S. jurisdiction), alien (formed outside the United States). An authorized insurer holds a certificate of authority from the commissioner. "Transact" covers soliciting, negotiating, selling or effectuating a contract and handling matters that arise after it takes effect. A fraternal benefit society operates on a lodge system with a representative form of government (33-7-105).

Policy forms must be filed at least 60 days before delivery. A form the commissioner hasn't acted on within 60 days is deemed approved (33-1-501). Ocean marine and foreign trade policies are exempt from filing.

Producer licensing

Definitions (33-17-102):

• An insurance producer is a person required to be licensed to sell, solicit or negotiate insurance.
• Solicit means attempting to sell, or urging a person to apply for, a particular kind of insurance.
• Negotiate means conferring with or advising a buyer about the substantive terms of a contract.
• A consultant gives advice about policies for a fee and needs a consultant license. Attorneys acting as lawyers are exempt (33-17-502).
• A public adjuster represents the insured. An adjuster works for the insurer as an independent contractor.
• A license lapses when it isn't renewed by the biennial renewal date. A license by itself gives no authority to bind an insurer.

Qualifications (33-17-211):

• age 18 or older
• passed the exam for each line within 12 months
• competent, trustworthy and of good reputation
• a background examination with fingerprints, paid by the applicant or the insurer, with a confidential report (33-17-201, 33-17-220)

A resident license terminates if the producer moves to another state. The producer then applies for a nonresident license. An assumed business name must be registered with the commissioner before use. A business entity must designate a licensed producer responsible for compliance.

Lines. Montana's health line is the disability line. Selling auto and homeowners needs property and casualty authority (33-17-214).

Exam exemptions (33-17-212): an applicant who held the same license within the prior 12 months, and nonresidents licensed in their home state.

Nonresidents (33-17-401) get a license if they're in good standing in a home state that licenses Montana residents on the same basis. If the home-state license is revoked, the Montana license terminates automatically. A nonresident is subject to the code as though a resident (33-17-406).

Temporary licenses (33-17-216, 33-17-217):

• Issued without an exam to the surviving spouse, next of kin or estate administrator of a deceased or disabled producer, to the designee of a producer entering military service, or in other public-interest cases.
• The holder need only qualify as to age, residence and trustworthiness.
• Term: 90 days, extendable 90 more. A license for an executor may run until the business is sold, up to 15 months.
• Only one per individual (or per business) in any 12 months. It covers only the lines the replaced producer held, with the same powers as a permanent license.

A producer called to active military duty may go on inactive status. The producer can't transact business, and CE is waived (33-17-219).

Continuing education (33-17-1203, 33-17-1205)

• 24 credit hours every 24 months, including at least 3 hours of ethics and 1 hour on changes in Montana insurance law. Adjusters, public adjusters and consultants have the same requirement.
• Producers licensed only for limited lines credit, surety bail bonds or prepaid legal need 5 hours per biennium.
• Temporary licensees are exempt. The commissioner may grant a good-cause extension of up to 1 year.
• Missing CE makes the license lapse. A lapsed licensee may not do business under anyone else's license, including an agency's. The license can be reinstated by filing the CE certification within 1 year of the lapse (33-17-1002).
• Providers can take up to 30 days to report completions, so the CSI advises finishing 30 days before expiration.
• Product training: a one-time 4-hour annuity course before selling annuities, verified by the insurer (33-20-807). A one-time 8-hour long-term care course plus 4 hours every 24 months for LTC sellers (33-22-1128). The CSI lists a one-time 3-hour NFIP flood course for resident producers selling federal flood insurance.

Appointments (33-17-231, 33-17-236)

• A producer may not claim to represent an insurer unless appointed by it.
• The insurer files the notice of appointment within 15 days after the agency contract is executed. A timely appointment is effective on the earlier of the contract date or the filing date. A late filing is effective only when filed.
• Appointments are perpetual until canceled by the insurer. If the insurer loses its Montana authority, its appointments end.
• On termination, the insurer must promptly notify the commissioner and the producer in writing. For terminations involving specified violations, notice is due within 30 days, or immediately for certain causes (33-17-237). Statements in the termination notice can't be used as evidence against the insurer by persons affected (33-17-231(4)).
• P&C, title and surety producers may keep servicing, and receiving commissions on, business written during the appointment after it ends. This doesn't apply to life appointments or to employees of the insurer (33-17-232).

Producer duties (33-17-1101 to 33-17-1103, 33-17-214)

• Keep a place of business in Montana that's open to the public. It may be in the producer's home. Display the license conspicuously, and give your license number on request.
• Keep transaction records for 3 years after the transaction is completed.
• Report a change of address in writing within 30 days. Report the final outcome of administrative actions in other states.
• Premiums are trust funds. Hold them in a separate trust account as a fiduciary. One account may hold funds of several insurers and insureds if each person's share can be determined from the records.
• Commission sharing is allowed only with a person licensed for the same kind of insurance. Renewal and deferred commissions may still be paid to a person entitled to them. Surplus lines producers may share with P&C producers.
• A producer may not act as legal guardian of a client unless the client is immediate family or the commissioner or a court approves (33-17-1005).
• A producer may charge a financial planning fee only under a signed written agreement, kept 3 years (33-18-250, enacted 2025).

Discipline and penalties

• Grounds (33-17-1001) include:

  • a felony conviction
  • cheating on an exam
  • forgery
  • knowingly accepting business from an unlicensed person
  • discipline of a similar license in another state
  • failing to follow a child support order

  Surrendering the license doesn't end the commissioner's authority to act.

• After a revocation, no new license for at least 1 year, and the commissioner may refuse for up to 5 years. Two revocations mean permanent ineligibility (33-17-1002).

• Fines after a hearing: up to $25,000, but no more than $5,000 per violation for producers and adjusters (33-1-317).

• Temporary cease and desist (33-1-318):

  • The respondent has 15 days to request a hearing.
  • The hearing is held within 20 days of the request.
  • The order stays in effect until 10 days after the hearing.
  • An unpaid fine becomes a lien on the person's Montana assets and forfeits the right to do business.

• Violating an unfair-practices desist order: up to $1,000 per violation, $10,000 in the aggregate (33-18-1005).

• Acting without a license brings fines and cease and desist orders (33-17-1004).

Unfair trade practices (Chapter 18)

• Misrepresentation (33-18-202) includes misstating dividends, intentionally misquoting a premium, and calling insurance "free" as an inducement.
• Twisting (33-18-204) means misrepresentation or an incomplete comparison to induce a lapse, surrender or exchange. Breaking the life replacement rule is treated as twisting (ARM 6.6.309).
• False advertising in any medium, including email and the internet (33-18-203).
• False financial statements: a $1,000 fine and/or 6 months in county jail (33-18-205).
• Unfair discrimination (33-18-206):
  • Life: between people of the same class and equal expectation of life.
  • Disability: between people of essentially the same hazard.
  • P&C insurers may not refuse or limit coverage because of sex or marital status or solely because of a physical or mental impairment (33-18-210).
  • Since a 2021 amendment, Montana's Human Rights Act lets insurers use sex or marital status in premium rates through accepted ratemaking methods (49-2-309).
• Rebating:
  • Life, annuities and disability: barred (33-18-208). Fair dividends from surplus and reduced rates for payroll-deduction plans are allowed (33-18-209).
  • P&C: an inducement is allowed only if it's in a filing with the commissioner. The ban covers the person who accepts a rebate too (33-18-210).
  • Exceptions: discounts for military members and their families (not varied by rank), telematics benefits, and homeowner loss-prevention credits.
• Lender coercion (33-18-501): a borrower must be told in writing that loan-related insurance may be bought from an insurer or producer of their choice.
• Illegal premium dealing (33-18-212): collecting premium for coverage that isn't provided.
• Postclaim underwriting (33-18-215): an insurer may not rescind or add a rider after issue unless there was a material misrepresentation or nonpayment.
• A producer who owns or works in a long-term care facility may not sell life or disability coverage to its residents (33-18-502).

Claims practices (33-18-201, 33-18-232, 33-18-242):

• The listed unfair claim practices violate 33-18-201 when frequent enough to show a general business practice. Examples:
  • refusing to pay without a reasonable investigation
  • forcing insureds to sue by offering substantially less than they later recover
• Insurers must pay or deny within 30 days of proof of loss, or 60 days if they reasonably asked for more information. Late payments carry 10% annual interest (owed only if over $5).
• An insured may sue under the private right of action within 2 years of the violation. A third-party claimant must wait until the underlying claim is settled or tried. A reasonable basis to contest the claim is a defense.

Insurance fraud (33-1-1201 and following)

• Civil insurance fraud includes:
  • presenting false or misleading information on a claim
  • a provider billing for services not given
  • accepting premium knowing no coverage will be provided
• Reporting: a producer reports suspected fraud to the insurer within 60 days of discovery. If the insurer finds fraud reasonably likely, it forwards the report to the commissioner within 30 days (33-1-1205).
• Reporters are immune from civil liability absent malice (33-1-1210). The commissioner must order restitution (33-1-1211).

Privacy, seniors and surplus lines

• Privacy (Insurance Information and Privacy Protection Act, Chapter 19):
  • The written notice of information practices is given at application, and to policyholders no later than policy delivery.
  • Pretext interviews are barred except in a claim investigation with reasonable suspicion of fraud or criminal activity.
  • Requests to see recorded information are answered within 30 business days.
• Elder abuse (52-3-803, 52-3-811): a vulnerable adult includes anyone 60 or older. Mandated reporters report suspected exploitation to DPHHS or the county attorney.
• Surplus lines (33-2-302 and following):
  • The home state of the insured governs.
  • Before using a nonadmitted insurer, the producer makes a diligent effort with three authorized insurers. The search isn't needed when an authorized insurer's quote is at least 10% higher.
  • The insured must be told the guaranty fund won't pay if the insurer fails.
  • A resident surplus lines license requires a P&C license.
  • The surplus lines producer collects and remits the premium tax and keeps records 5 years.
  • Properly placed surplus lines policies are fully valid.

Guaranty associations

• The P&C association excludes punitive damages. Claimants must first exhaust any solvent insurer's policy. Insurers recoup assessments through rates.
• Using guaranty association coverage to sell insurance is an unfair trade practice. The required summary document tells owners not to rely on it when choosing an insurer (33-10-210).

Common exam traps

• The commissioner is the elected State Auditor, not a governor's appointee.
• The pass mark is a scaled 75, both parts must be retaken after a failure, and there's no Personal Lines exam.
• 24 CE hours must include 3 ethics hours and 1 hour of Montana law changes.
• Appointments: 15 days to file, perpetual until canceled.
• Producer fines are capped at $5,000 per violation. The general cap is $25,000.
• Fraud reports go producer to insurer within 60 days, then insurer to commissioner within 30 days.
• Montana permits commingling in one trust account if each share is ascertainable. Mixing premiums with personal funds is still prohibited.