Because it’s licensing vendor suspended operations, the Michigan Department of Insurance and Financial Services will offer new producer license applicants temporary licenses.
The bulletin states, “Although considered essential under Executive Order 2020-21 and DIFS’ Bulletin 2020-12, many entities and persons working within the insurance industry have had to suspend aspects of their business operations to mitigate the risks associated with COVID-19 pandemic. The third-party vendor under contract with DIFS to provide licensing examination services has suspended its operations by closing its testing facilities in response to the COVID-19 pandemic. The suspension of operations and/or closure of testing facilities by this vendor has resulted in some prospective new producer license applicants being unable to obtain licensure and secure employment.”
In light of this, DIFS will issue temporary producer licenses to applicants meeting the requirements for licensure under Section 1205(1) of the Insurance Code, MCL 500.125(1), without requiring examination, subject to certain conditions.
Temporary producer licenses will be issued for a period of 90 days or until 30 days after the cessation of the state of emergency related to COVID-19. The period will not exceed 180 days. Temporary producer licenses will expire automatically 90 days after issuance or 30 days after the state of emergency is lifted by the governor.
Temporary producer licenses are subject to cancellation or revocation if the temporary licensee violates the state’s insurance laws or if the interests of insureds or the public are endangered. These licenses allow producers to operate as resident temporary producers. Temporary producers are not eligible for non-resident licenses in other states and are not eligible to sponsor another temporary producer licensee.
“The temporary producer must have a licensed sponsor who assumes responsibility for all acts of the temporary licensee, including compliance with the Michigan Insurance Code and related regulations. The sponsor may be either:
- A resident individual or business entity producer whose license is in good standing; or
- An insurance company authorized to do business in Michigan which will assume all training and supervision responsibilities with respect to the temporary licensee. The sponsoring insurer must appoint the temporary producer and the temporary appointment will coincide with the duration of the temporary license. The temporary licensee is not required to be an employee of the insurance company but may also be an independent agent.”
The sponsor must be authorized in the same line of insurance the producer is applying and maintain a record of all producers operating under a temporary license and business transacted by them. They should assist producers with completing the examination process when the state of emergency has been lifted and the third-party examination vendors resume operations.
“A temporary licensee sponsored by a resident individual or business entity producer must secure an appointment with an insurer prior to selling, soliciting, or negotiating insurance. This temporary appointment will coincide with the duration of the temporary license,” the bulletin states.
“Any active temporary producer license issued pursuant to this bulletin may be converted to a regular producer license by completion of all prerequisites of a license for the desired line or lines of insurance, including meeting all examination requirements under the Insurance Code,” the bulletin continued. “No additional fee shall be required in association with the issuance of the regular producer license unless additional lines of insurance are requested. Recipients of such temporary producer licenses will be subject to any and all limitations on the authority of such temporary licenses pursuant to Michigan law.”