Licensing Administration
FAQs
| Q. |
WHAT
IS AN INSURANCE APPOINTMENT? |
| R. |
When an
insurance agent is licensed in a state and
wants to sell products, he/she may have to
have an appointment with an insurance company
operating in that state. An appointment is
an agreement between an insurer and a licensee
authorizing the licensee to represent the
insurer in the sale of its products. |
| |
| Q. |
WHAT
HAPPENS IF AN AGENT SELLS INSURANCE WITHOUT
AT ACTIVE APPOINTMENT? |
| R. |
If the Department
of Insurance does a market conduct exam, and
through its investigation finds that the agent
is selling without an appointment, a substantial
fine can be imposed on the company. |
| |
| Q. |
WHAT
IS AN APPOINTMENT RENEWAL |
| R. |
An appointment
renewal continues an existing appointment.
Most states and insurance companies require
that an agent's appointment be renewed. The
renewal may simply require filing a fee to
the state Department of Insurance or insurance
company, or it may also require a signature
of a corporate officer on a specialized form. |
| |
| Q. |
HOW DOES
ONE KNOW WHEN TO RENEW AN APPOINTMENT? |
| R. |
Each state
has its own rules for appointment renewal.
Expiration dates may be based on a legislatively
mandated date (e.g. February 15 every two
years), on the original date of issuance,
or even the insurance company admission date. |
| |
| Q. |
WHAT
IS "ELECTRONIC FILING"? |
| R. |
Electronic
filing refers to processing appointments and
at least some aspect of licensing via an electronic
interface. Currently, most states make use
of electronic filing for at least some portion
of their licensing administration tasks. The
trend in licensing administration is toward
automation, and currently three states - Michigan,
Iowa, and Wisconsin - have converted entirely
to electronic filing for appointments. This
means companies must make use of the electronic
format in order to appoint new agents and
expand their field force. |
| |
| Q. |
WHAT
IS OFAC? |
| R. |
OFAC, or
the Office of Foreign Assets Control, is a
division of the U.S. Department of Treasury.
OFAC administers and enforces economic and
trade sanctions against targeted foreign countries
and their agents, terrorism sponsoring agencies
and organizations, and international narcotics
traffickers. |
| |
| Q. |
WHAT
DO THE LAWS REQUIRE? |
| R. |
Under the
laws administered by OFAC, financial institutions,
securities firms, and insurance companies
are obligated to block or "freeze"
property and payment of any funds transfers
or transactions and to report all blockings
to OFAC within ten days of occurrence. |
| |
| Q. |
WHAT
ARE THE PENALTIES FOR NON-COMPLIANCE? |
| R. |
Depending
on the program involved, OFAC has the authority
to impose corporate and personal fines of
up to $10 million and 30 years in jail, civil
penalties of up to $1 million per incident,
as well as the forfeiture of funds or other
property involved in the violation. Over the
past several years, OFAC has had to impose
millions of dollars in civil penalties involving
U.S. financial institutions. |
| |
| Q. |
HOW DOES
A COMPANY KNOW WHAT/WHO TO BLOCK? |
| R. |
OFAC's listings
of Specially Designated Nationals and Blocked
Persons, licensing guidelines, and Federal
Register Notices are available electronically
from OFAC. Whenever there is an update to
any OFAC regulation, an addition or removal
of an SDN, or any other announcement, the
information is first posted in the Federal
Register, and then posted by OFAC. However,
OFAC admits that "the listing is a partial
one and any U.S. nationals must take reasonable
care to make certain that such foreign nationals
are not specially designated." |
| |
Financial
relationships covered by OFAC are extensive…
All employees, agents, and affiliates must be
checked to see if they are “listed.”
Financial transactions covered by OFAC include,
but are not limited to, the following:
· Deposit accounts
· Loans
· Wire transfers
· ACH transfers
· Loan payments
· Trust accounts
· Lines of credit
· Letters of credit
In addition, the names of all parties to a transaction
should be checked against the names of individuals,
entities, geographical locations, or countries
identified by OFAC. This includes, but is not
limited to, the following:
· Sending parties
· Receiving parties
· Beneficiaries
· Collateral owners
· Guarantors/Cosigners
Complying with the law can be challenging…
Financial institutions are required to check all
of the names in their employee database and customer
database. Each new customer must be checked, and
these databases must be re-checked each time OFAC
adds new names to its list. The current OFAC list
contains more than 5,000 individuals and organizations;
OFAC made changes to its list 32 times in the
course of 2002. In addition, each name typically
contains multiples aliases—effectively increasing
the size of the list many times over. If a match
occurs, the financial institution must take appropriate
action. This can include blocking funds or rejecting
the transaction. All accounts for a matched name
should be frozen immediately and placed in a locked
account. A company officer must be notified immediately,
as well as the “listed” individual
or entity. Needless to say, when a match occurs,
the financial institution will want the information
to be accurate.
OFAC compliance requires more than a list
… Many companies mistakenly believe that
OFAC compliance requires nothing more than keeping
a copy of the SDN list on hand. This is not correct.
OFAC compliance requires every financial institution
to establish a compliance program. Elements can
include a policies and procedures manual, a method
for monitoring new and existing relationships,
and some form of interdict software. The
AES, LC solution … an effective, inexpensive
response to a complex and potentially expensive
compliance issue
AES, LC’s specially designed software can
analyze a company’s database for matches
with the OFAC list. The software’s matching
technology provides both spelling-based and phonetic-based
search and find protocols that overcome the difficulties
inherent in multiple variations of spellings that
can occur in large lists.
By using AES, LC, a company can fully automate
its efforts to screen for OFAC matches. In addition,
the AES, LC software will significantly reduce
the incidents of false positives (i.e., wrong
matches).
Although OFAC does not require use of software
in an institution’s compliance efforts,
the size of the data involved make it impractical
to do otherwise. Furthermore, use of specialized
software is looked at favorably by compliance
officers conducting audits, and provides an effective
mitigating factor when assessing penalties should
a violation occur.
|
|
Standard
Schedule of Services
- APPOINTMENTS
- Resident Individual
Agent/Broker
- Non-Resident
Individual Agent/Broker
- Resident Agency
- Non-Resident
Agency
- FIRST TIME
LICENSE
- Individual
Agent/Broker
- Agency and
One Principal
- Corporate
Qualification
- Administrator
- RENEWALS
- Appointment
- Individual
Agent/Broker
- Agency and
One Principal
- Corporate
Qualification
- Administrator
- Continuing
Education Renewal
- Certifications
for Renewals
- OTHER
- Name Change
(other than re-filing)
- Change of
Address
- Termination
of Appointment
- Investigative
Reports
Based
on Presidential declarations of national
emergency, a division of the Department
of Treasury administers and enforces a sanctions
policy under nine basic statutes. All
U.S. insurance companies need to be aware
that they may be held accountable for sanctions
violations. From “Foreign Assets
Control Regulations and the Insurance Industry”
In the Age of 9/11, the world as we have
known it has changed. So has how we do business.
More than ever before, a company must know
its customers…
Any transaction involving U.S. currency
is subject to laws governing embargoed countries,
specially designated nationals, and blocked
persons. Just some of the transactions
involved can include premium payments, policy
loan interest payments, and payments to
beneficiaries.
More than ever before, a company must know
its employees, affiliates, and agents…
Any parties involved in a contract—underwriters,
brokers, and agents—must be checked
against the current list of Specially Designated
Nationals and Blocked Persons. If the person
is a “Blocked Person,” a company
may not contract with him or her. More than
ever before, ignorance is expensive…
Criminal penalties and fines can reach $1
million. Today, a company must check each
and every transaction for potential violations,
and place added scrutiny in hiring and contracting.
More than ever before, a company needs to
have a strategy to meet OFAC requirements…
OFAC, or the Office of Foreign Assets Control,
is a division of the U.S. Department of
Treasury. OFAC administers and enforces
economic and trade sanctions against targeted
foreign countries and their agents, terrorism
sponsoring agencies and organizations, and
international narcotics traffickers. Compliance
with OFAC requirements is not just smart
business… it is the law! Effective
OFAC compliance requires a strategy …The
compliance experts at AES, LC can be your
strategy to meet the OFAC requirement. By
providing comprehensive checks to keep a
company from doing business with a “listed”
organization or individual, AES, LC is the
first—and best—line of defense
against the expense of fines and sanctions.
Protect your bottom-line and your reputation
… Rather than “rebuilding the
wheel” with an expensive internal
system, let AES, LC be your strategy for
handling OFAC compliance. Companies have
been fined, and the fines can be significant…
Depending on the program involved, criminal
violations of the statutes administered
by OFAC can result in corporate and personal
fines of up to $1 million and 12 years in
jail. OFAC also has the authority to impose
civil penalties. In the case of Iraq sanctions,
civil penalties of up to $275,000 per count
are authorized.
|
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