The Michigan Insurance Code requires the licensure and appointment of producers in Michigan so that consumers can be protected and assured that insurance transactions are properly effected. Insurance companies are authorized to write a particular line or lines of coverage (also known as qualifications, e.g life, health, etc.). Before an insurance company may appoint a licensee for a qualification, the company must first be authorized to write that particular line in Michigan. It is the responsibility of the insurer to make sure our records accurately reflect its producer/agency work force. An individual or agency may not act as an agent of an insurer unless the producer becomes properly appointed with that insurer. An agency may not receive its appointment until an affiliated individual producer is licensed for the identical qualification and appointed by the same insurer.
By law, insurers are responsible to consumers for the acts of their appointed producers. In Michigan “health benefit corporations,” i.e., Blue Cross/Blue Shield, nonprofit dental care corporations, and HMOs are considered insurers for purposes of appointment requirements. When it submits an appointment, the company attests that it has investigated the applicant and has found the applicant to be worthy of the public’s trust. When a producer or other licensee mishandles a transaction, either through misfeasance or malfeasance, the insurer may be held liable to the consumer for rectifying such transactions. A producer is a fiduciary for the insurer and is responsible for promptly remitting all premiums and other insurance proceeds to the insurer as provided by law or contract. “Brokerage” is not allowed in Michigan. A broker represents a consumer - not an insurer. Acts of misfeasance or malfeasance by a person acting as a broker do not bind any insurer and thereby place the consumer at risk.
Process
A notice of appointment for the qualifications held by the producer must be electronically filed with our office by the insurer within 15 days from the date the first insurance application is submitted or an agency contract is executed. The effective date requested on an appointment submission cannot be more than 15 days prior to, or after, the date the electronic appointment is submitted to our office. An appointment submitted outside of these parameters will generate an error notice to the insurer and a producer will not be considered properly appointed.
Appointment cancellations must also be electronically filed with our office by the insurer. The exception is that any cancellation for cause must be submitted in writing accompanied by an explanation. The effective date requested on an electronic cancellation submission cannot be more than 30 days prior to, or after, the date the cancellation is submitted to our office.
Cancellation of an appointment will not affect the status of the license or qualification.
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