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An agent may act as a representative of an insurer without being appointed with that insurer for a period of 30 days from the date the first application is executed. In order to act as a representative without being appointed, the agent must have financial responsibility of at least $1,000,000 per occurrence and $2,000,000 in the aggregate on file with the Department. The financial responsibility may be in the form of an errors and omissions policy (Form 991), bond (Form 993), cash deposit, letter of credit (Form 992) or combination of any of these forms. These forms are available by contacting the Department of insurance directly.
An insurer must, within 45 days from the date the first application or agency contract is executed, file a written notice of appointment with the Commissioner and mail a copy of the notice to the agent. The Department then has 15 working days after receiving the notice to notify the insurer whether the agent is eligible for appointment. The insurer must also send the agent a copy of approval of the appointment. If the agent has not received a copy of the approval from the insurer within 30 days from the date the first application was executed, the agent must discontinue representing that insurer until approval is received. Please note that the 30day time frame for agents and the 45day time frame for insurers are almost running concurrently.
All those currently licensed agents who want to qualify for this temporary exemption from appointment need to file new financial responsibility; otherwise, the licensed agents need to be appointed with each insurer. At present, the Department's system only reflects the statutory minimum, regardless of the amount of coverage filed in the past.
This article is intended to be helpful and informative. But even common legal matters can become complex and stressful. A qualified insurance lawyer can address your particular legal needs, explain the law, and represent you in court. Take the first step now and contact a local insurance attorney to discuss your specific legal situation.