State RegulationsMI specificDifficulty 1/5
Under Michigan's Insurance Code of 1956, which license must an individual hold to be compensated by an insurer for soliciting insurance on the insurer's behalf?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
The producer license under M.C.L. 500.1206 is the Michigan license for individuals who sell, solicit, or negotiate insurance for insurers, and M.C.L. 500.1240 makes it unlawful to pay compensation for such activity to someone licensure-required but unlicensed. The Insurance Code of 1956 also requires insurers to write business through duly licensed producers, so soliciting for compensation without a producer license is unlawful on both sides of the payment.
Why the other options are wrong
- B) A counselor license under M.C.L. 500.1232 authorizes advising clients about insurance for a fee, not soliciting policies on an insurer's behalf.
- C) An adjuster license covers investigating and settling claims, not selling or soliciting insurance.
- D) A surplus lines agent license is a specialized license for the surplus lines market, not the general license for insurer-directed solicitation.
Memory hook
Sell or solicit for a carrier? Producer. Advise for a fee? Counselor. Settle claims? Adjuster.