Responding to or Defending Allegations before the North Carolina Department of Insurance
No licensee ever wants to get a letter from the Agent Services Division of the Department of Insurance [“ASD”]. If you received a letter from the ASD regarding allegations of misconduct affecting your license or denial of licensure, this generally means the ASD has received a complaint or is making an inquiry due to some other information received at the ASD. You may be uncertain about what to do next, what the procedures are and what the results may be.
You may also be trying to decide whether you need to hire an attorney in responding to the ASD. Our firm represents licensees like you in responding to the ASD and defending against allegations of misconduct and denial of licensure. Representation at the initial informal stage is significantly less expensive than in a formal evidentiary public hearing; therefore, the investment in protecting your license and livelihood generally is more cost-effective in the earlier stages. Although a licensee has a right at any time in the process to be represented by legal counsel, our firm’s best opportunity to assist you in obtaining a favorable or acceptable outcome is in these early stages. We have a good working relationship with counsel for the Department and frequently can work out an acceptable resolution without the need for a formal hearing, including, in some cases, dismissal without any action. Our general explanation of board procedures has a more detailed discussion of how we may be able to assist you in informal proceedings.
In the sections below, we attempt to address some of the questions you may have and explain the general process, procedures and possible results.
The Agent Services Division of the North Carolina Department of Insurance
The Agent Services Division of the N.C. Department of Insurance is the division that oversees the licensing and continuing education for insurance licensees, including insurance agents, title agents and bail bondsman, among others. The Insurance Commissioner, through the ASD, has the authority to place any licensee on probation, or suspend, revoke, or refuse to renew any license issued for any one or more of the causes listed:
- Providing materially incorrect, misleading, incomplete, or materially untrue information in the license application;
- Violating any insurance law of this or any other state, violating any administrative rule, subpoena, or order of the Commissioner or of another state’s insurance regulator, or violating any rule of FINRA;
- Obtaining or attempting to obtain a license through misrepresentation or fraud;
- Improperly withholding, misappropriating, or converting any monies or properties received in the course of doing insurance business;
- Intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance;
- Having been convicted of a felony or a misdemeanor involving dishonesty, a breach of trust, or moral turpitude;
- Having admitted or been found to have committed any insurance unfair trade practice or fraud;
- Using fraudulent, coercive, or dishonest practices, or demonstrating incompetence, untrustworthiness, or financial irresponsibility in the conduct of business in this State or elsewhere;
- Having an insurance producer license, or its equivalent, denied, suspended, or revoked in any other jurisdiction for reasons substantially similar to those listed;
- Forging another’s name to an application for insurance or to any document related to an insurance transaction;
- Willfully failing to provide the proper notification required by statute;
- Knowingly accepting brokered insurance business from an individual who is not licensed to broker that kind of insurance;
- Soliciting, negotiating, or selling insurance in this State for an unauthorized insurer, regardless of whether the licensee or applicant knew that the insurer was unauthorized;
- Failing to comply with an administrative or court order imposing a child support obligation, after entry of a final judgment or order finding the violation to have been willful;
- Failing to pay State income tax or comply with any administrative or court order directing payment of State income tax, after entry of a final judgment or order finding the violation to have been willful;
- Cheating on an examination for an insurance license or for a prelicensing or continuing education course, including improperly using notes or any other reference material to complete an examination for an insurance license or for a prelicensing or continuing education course;
- Willfully over-insuring property;
- Any cause for which issuance of the license could have been refused had it then existed and been known to the Commissioner at the time of issuance.
Possible Actions