The New Hampshire Insurance Department is reminding insurance companies and agencies that they must notify the department when terminating producers for cause.
“In the interest of ensuring compliance and upholding the integrity of our insurance system, we urge all insurers to take heed of this important bulletin,” Deputy Commissioner DJ Bettencourt said in the bulletin, posted Tuesday, Aug. 8.
New Hampshire statutes require companies to provide the notification within 15 days after the termination of a producer for reasons listed in Section 402-J:12. Those reasons include providing incorrect or misleading information on a license application; violating state insurance laws; being convicted of a felony; improperly withholding funds; and other inappropriate actions.
In addition, the department is asking insurers and agencies to look through their records and make sure that all terminations for cause over the last three years have been reported. Insurers have 30 days, until Sept. 7, to come into compliance, although a grace period will be allowed for late reporting, the NHID said.
“However, beyond this initial period, insurers found to be in violation will face serious consequences, including potential suspension or revocation of their certificates of authority, accompanied by the imposition of significant administrative fines,” said Bettencourt, who last week was elevated to the commissioner role, pending approval by the state’s Executive Council.
The producer notification statute was approved by lawmakers in 2001 and reasons for termination were updated in 2020. The department’s bulletin did not explain what prompted the reminder this week.
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