Chapter 12. Procedures — Written Consent — Federal Law
Regulation .01 Purpose.LinkCopy Citation
The purpose of this chapter is to establish procedures and requirements for individuals who are required by 18 U.S.C. §1033 to obtain written consent from the Commissioner before the individuals may engage in the business of insurance in the State.
Regulation .02 Definitions.LinkCopy Citation
A.
In this chapter, the following terms have the meanings indicated.
B.
Terms Defined.
(1)
“Application counselor” has the meaning stated in Insurance Article, §31-101(a-1), Annotated Code of Maryland.
(2)
Application Form.
(a)
“Application form” means a standardized application form developed by the Insurance Administration for submission by individuals applying for a written consent to engage in the business of insurance in the State under this chapter.
(b)
“Application form” includes the short application form and the comprehensive application form.
(3)
Business of Insurance.
(a)
“Business of insurance” means writing insurance or reinsuring risks.
(b)
“Business of insurance” includes:
(i)
All acts necessary or incidental to writing insurance or reinsuring risks;
(ii)
The activities of an individual who acts as, or is, an officer, director, agent, or employee of an insurer; and
(iii)
The activities of any other individual who is authorized to act on behalf of an officer, director, agent, or employee of an insurer.
(4)
“Commissioner” means the Maryland Insurance Commissioner.
(5)
“Felony involving breach of trust” includes any felony constituting or involving misuse, misapplication, or misappropriation of anything of value that:
(a)
Is held as a fiduciary; or
(b)
Belongs to any public, private, or charitable organization.
(6)
“Felony involving dishonesty” includes any felony constituting or involving:
(a)
Perjury;
(b)
Bribery;
(c)
Forgery;
(d)
Counterfeiting;
(e)
False or misleading oral or written statements;
(f)
Deception;
(g)
Fraud;
(h)
Schemes or artifices to deceive or defraud;
(i)
Material misrepresentation; and
(j)
Failure to disclose material facts.
(7)
“Fiduciary” includes an individual acting as:
(a)
A trustee;
(b)
An administrator;
(c)
An executor;
(d)
A conservator;
(e)
A receiver;
(f)
A guardian;
(g)
An agent;
(h)
An employee;
(i)
A partner;
(j)
An officer;
(k)
A director; or
(l)
A public servant.
(8)
“Individual Exchange” has the meaning stated in Insurance Article, §31-101(h), Annotated Code of Maryland.
(9)
“Individual Exchange navigator” has the meaning stated in Insurance Article, §31-101(i), Annotated Code of Maryland.
(10)
“Interstate commerce” means commerce:
(a)
Within the District of Columbia or any territory or possession of the United States;
(b)
Between any point in a state, territory, possession, or the District of Columbia and any point outside the state, territory, possession, or the District of Columbia;
(c)
Between points within the same state through any place outside the state; or
(d)
Over which the United States has jurisdiction.
(11)
“NAIC” means the National Association of Insurance Commissioners.
(12)
“SHOP Exchange” has the meaning stated in Insurance Article, §31-101(w), Annotated Code of Maryland.
(13)
“SHOP Exchange navigator” has the meaning stated in Insurance Article, §31-101(x), Annotated Code of Maryland.
(14)
“State” means:
(a)
Any state;
(b)
The District of Columbia;
(c)
The Commonwealth of Puerto Rico;
(d)
The Northern Mariana Islands;
(e)
The Virgin Islands;
(f)
American Samoa; and
(g)
The Trust Territory of the Pacific Islands.
Regulation .03 Written Consent Required.LinkCopy Citation
A.
Scope. This regulation applies to the following individuals:
(1)
An officer, director, or employee of a domestic insurer;
(2)
An individual who performs substantial insurance-related activities for a domestic insurer or a resident licensee, including:
(a)
An insurance producer;
(b)
A third-party administrator;
(c)
An independent contractor;
(d)
An actuary;
(e)
A reinsurer;
(f)
An underwriter; and
(g)
An adjuster; and
(3)
An individual who maintains a resident license or certificate of qualification in Maryland, including:
(a)
An insurance producer;
(b)
A managing general agent;
(c)
An adjuster;
(d)
A SHOP exchange navigator;
(e)
An individual exchange navigator; and
(f)
An application counselor.
B.
Consent Required. If an individual to whom this regulation applies has been convicted of a felony involving dishonesty, a felony involving breach of trust, or a violation of the federal Violent Crime Control and Law Enforcement Act of 1994, the individual may not engage in the business of insurance affecting interstate commerce in Maryland unless the individual obtains the written consent of the Insurance Commissioner.
C.
Exceptions. Notwithstanding §B of this regulation, an individual is not required to obtain the written consent of the Insurance Commissioner if:
(1)
The conviction of the individual has been expunged; or
(2)
The individual has been pardoned for the conviction.
Regulation .04 Application for Written Consent.LinkCopy Citation
A.
In General. An individual who is required to obtain written consent to engage in the business of insurance shall comply with the requirements of this regulation.
B.
Application Form.
(1)
Except as provided in §B(2) of this regulation, an applicant for written consent shall submit the short application form to the Commissioner.
(2)
An applicant for written consent shall submit the comprehensive application form to the Commissioner if:
(a)
The applicant intends to act as an insurance producer; or
(b)
Following review of the applicant's short application form, the Commissioner:
(i)
Determines that the applicant may be a threat to the public; and
(ii)
Requests the applicant to submit a comprehensive application form.
(3)
An applicant shall attach two recent 2 inch by 2 inch photographs of the applicant to the upper right hand corner of the application form.
(4)
The application form shall include a notarized signature of the applicant affirming that the information provided in the application form is truthful and complete.
C.
Credit Report. An applicant shall submit to the Commissioner a credit report prepared within 30 days of the date of application and certified by a credit bureau.
D.
Request for Criminal Records Check.
(1)
An applicant shall apply for a records check for the existence of criminal convictions in the criminal history records information maintained by the Criminal Justice Information System Central Repository of the Department of Public Safety and Correctional Services and received from the Federal Bureau of Investigation by:
(a)
Completing and submitting, in a manner approved by the Director of the Central Repository, an application containing identifying information, including the applicant's Social Security number, to verify identity and preserve the security of the record maintained by the Central Repository;
(b)
Submitting two complete sets of legible fingerprints taken on forms approved by the Director and the Federal Bureau of Investigation; and
(c)
Paying the applicable processing fees.
(2)
The applicant shall submit a copy of the application for a criminal records check to the Commissioner.
E.
Character References.
(1)
An application shall be accompanied by at least three letters of reference addressed to the Commissioner, attesting to the character and reputation of the applicant.
(2)
An individual who provides a letter of reference may not be related to the applicant by blood or marriage.
(3)
A letter of reference shall:
(a)
Indicate the length of time and the capacity in which the individual writing the letter has known the applicant;
(b)
Describe the applicant's character traits as they relate to the employment, position, or duties for which written consent is sought; and
(c)
State that the individual writing the letter is aware that the letter of reference is being provided in connection with a request for written consent to engage in the business of insurance despite the existence of a felony conviction.
F.
Additional Information. An applicant may submit any additional documents or information that the applicant would like the Commissioner to consider.
Regulation .05 Review of Application.LinkCopy Citation
A.
In General. On receipt of an application for written consent and the required accompanying information, the Commissioner shall review the application and information in accordance with this regulation to determine if the applicant should be granted written consent to engage in the business of insurance in the State.
B.
Notification of NAIC Members.
(1)
On receipt of an application for written consent, the Commissioner shall notify all other members of the NAIC that an application for written consent has been filed, identifying:
(a)
The name, address, and Social Security number of the applicant; and
(b)
The types of insurance activities to be conducted by the applicant.
(2)
The Commissioner shall allow at least 30 days for other members of the NAIC to respond with any relevant information about the applicant.
C.
Standard of Review.
(1)
The Commissioner shall determine if:
(a)
The applicant has been fully rehabilitated and no longer poses a risk or threat to insurance consumers or insurers; and
(b)
The issuance of written consent to the applicant is consistent with the public interest, federal and Maryland law, and any applicable court orders.
(2)
The Commissioner may grant written consent only if the mitigating circumstances clearly and substantially outweigh the seriousness of the applicant's criminal history together with any other aggravating circumstances.
(3)
In reviewing an application for written consent, the factors considered by the Commissioner shall include:
(a)
The interest in protecting property and the safety and welfare of consumers, businesses, and the general public;
(b)
The nature and severity of the act for which the applicant was convicted;
(c)
The date of the conviction;
(d)
The injury or loss caused by the act for which the applicant was convicted;
(e)
Whether the conviction is related to the business of insurance;
(f)
Whether the applicant completed a parole or probation;
(g)
Whether the applicant has been charged with, indicted for, or convicted of any other crimes;
(h)
Any evidence of the applicant's rehabilitation, including:
(i)
Good conduct in prison or in the community;
(ii)
Counseling or psychiatric treatment received;
(iii)
Acquisition of additional academic or vocational training;
(iv)
Successful participation in correctional work-release programs; and
(v)
The recommendation of individuals who have had the applicant under their supervision;
(i)
The nature and strength of any character references;
(j)
The applicant's business and personal record before and after commission of the crime;
(k)
Whether and to what extent the applicant has made material false statements in an application, renewal, or other document filed with the Commissioner; and
(l)
Whether and to what extent the applicant has made material false statements in applications or other documents filed with other state or federal agencies.
D.
Additional Information.
(1)
The Commissioner may request any additional documents or information that the Commissioner considers necessary to determine if an applicant should be granted written consent to engage in the business of insurance in Maryland.
(2)
If the Commissioner requests additional documents or information, the applicant shall submit the documents or information to the Commissioner within 30 days after receiving the request.
(3)
If an applicant fails to submit the requested documents or information to the Commissioner within 30 days, the application of the applicant shall be considered withdrawn.
E.
Verification of Duties. The Commissioner may verify with the applicant's employer or prospective employer the duties that the applicant will be performing for the employer.
Regulation .06 Grant of Written Consent.LinkCopy Citation
A.
In General. If the Commissioner decides to grant the applicant's request for written consent, the Commissioner shall issue a written consent to the applicant.
B.
Scope of Written Consent.
(1)
The written consent shall be:
(a)
Specific as to job duties; and
(b)
Conditioned on the individual remaining in a position with substantially similar duties.
(2)
If an individual who holds a written consent wishes to engage in additional duties within the business of insurance, the individual shall obtain a new written consent that includes those duties.
(3)
If an individual who holds a written consent assumes significantly different job duties without obtaining a new written consent, the written consent of the individual is immediately invalidated.
(4)
An individual who holds a written consent and changes employers is not required to obtain a new written consent if the individual's job duties with the new employer are substantially similar to the individual's job duties with the individual's former employer.
C.
Truth and Veracity of Information.
(1)
A written consent shall be conditioned on the truth and veracity of the documents and information submitted by or on behalf of the applicant.
(2)
If the applicant has made materially false or misleading statements or has failed to disclose material information, the written consent is void ab initio.
D.
Temporary Written Consent. The Commissioner may grant temporary written consent.
E.
Notification of NAIC Members. If the Commissioner grants a request for written consent, the Commissioner shall notify all other members of the NAIC.
Regulation .07 Denial of Written Consent.LinkCopy Citation
A.
Order. If the Commissioner denies the applicant's request for written consent, the Commissioner shall issue an order that:
(1)
States that the request is denied; and
(2)
Explains the reasons for the denial.
B.
Licensing Prohibited. An applicant who has been denied a written consent may not be granted or continue to hold a license or certificate of qualification to engage in the business of insurance in Maryland.
C.
Notification of NAIC Members. If the Commissioner denies an applicant's request for written consent, the Commissioner shall notify all other members of the NAIC.
Regulation .08 Hearing.LinkCopy Citation
The Commissioner shall hold a hearing in accordance with Insurance Article, §2-210, Annotated Code of Maryland, on the demand of any applicant who is aggrieved by:
A.
The denial of written consent by the Commissioner; or
B.
The scope of a written consent issued by the Commissioner.
Regulation .09 Subsequent Conviction.LinkCopy Citation
A.
Written Consent Invalidated Immediately. If an individual who has been granted written consent is subsequently convicted of a felony, the written consent of the individual is invalidated immediately without the necessity of any further action by the Commissioner.
B.
Notification. An individual who has been granted written consent and is subsequently convicted of a felony shall:
(1)
Immediately notify the Commissioner, the individual's employer, and any insurers with which the individual holds an appointment; and
(2)
Provide to the Commissioner all relevant documents and information about the felony conviction.
Chapter annotations
Authority: Insurance Article, §2-109(e), Annotated Code of Maryland
History: Effective date: June 24, 2002 (29:12 Md. R. 934)
History: Regulation .02B amended effective April 15, 2013 (40:7 Md. R. 613)
History: Regulation .02B amended as an emergency provision effective October 11, 2013 (40:22 Md. R. 1875); amended permanently effective January 6, 2014 (40:26 Md. R. 2166)
History: Regulation .03A amended effective April 15, 2013 (40:7 Md. R. 613)
History: Regulation .03A amended as an emergency provision effective October 11, 2013 (40:22 Md. R. 1875); amended permanently effective January 6, 2014 (40:26 Md. R. 2166)
History: Regulation .04D amended effective October 8, 2018 (45:20 Md. R. 920)
History: Regulation .09A amended effective April 10, 2006 (33:7 Md. R. 675)