(A) Purpose
The purpose of this rule is to implement statutes setting forth
standards of conduct and responsibility applicable to insurance license
applicants, licensees, and/or companies licensed or authorized to transact the
business of insurance by the superintendent of insurance.
(B) Authority
This rule is promulgated pursuant to the authority vested in
the superintendent under sections
3901.041,
3901.21, and
3905.01 to
3905.14 of the Revised
Code.
(C)
Conduct
The
following conduct by individuals
warranting
warrants
suspension, revocation, or refusal to issue or renew an insurance license,
assessment of a civil penalty, or imposition of any other sanctions authorized
under Title 39 of the Revised Code
.
:
Whenever it is shown, in accordance with the Revised Code, that
an individual has solicited, procured, or placed additional or replacement
health or sickness and accident insurance coverage where he or she knew or
should have known that the insured or potential insured:
(1) Was and would continue to be covered by
substantially duplicative insurance coverage, where the additional coverage
will either not pay additional benefits to those offered by the existing
coverage or will provide minimal benefits in relation to the cost to that
individual of maintaining such coverage; or
(2) Would not be entitled to the benefits of
that coverage, because of existing health conditions, where the agent had
caused that individual to believe that he or she would be entitled to such
benefits; or
(3) Intended to
replace existing insurance coverage but would not be entitled to receive
benefits from the replacing insurance coverage until he or she had completed
some waiting period, which the agent had not disclosed to the insured or
potential insured.
(D)
Responsibility of insurance company and/or agent for conduct of a licensed
insurance agent or
sub agent
an employee.
An insurance company and/or agent may be found to have engaged
in an unfair or deceptive practice, whenever it
any of the
following is shown that:
(1) The insurance company or the managing or
principal agent of an insurance agency knew or should have known of the
misconduct of its licensed agent
or employee,
sub-agent, as set forth in paragraph (C) of
this rule, and has adopted a practice whereby it has:
(a) Expressly ratified, encouraged, or
tolerated such misconduct;
or
(b) Failed to notify the Ohio department of
insurance on those occasions where it has reasonable cause to believe that
there has been a violation or is a continuing violation of this rule, and the
details thereof which are known by the company or agent. Such information shall
be treated as confidential by the department of insurance
in accordance with the statutes and rules contained in
Chapter 3901. of the Revised Code and agency 3901 of the Administrative
Code;
and
or
(c)
Failed, upon the request of the department of insurance, to make a reasonable
investigation to determine if such misconduct has occurred.
(2) An insurance company has
refused to refund an insured's or potential insured's premium payment,
insurance distribution or refund, or to issue insurance coverage to that
person, at that person's election, where the company's agent has violated any
insurance law or rule.
An agent shall be deemed to be the agent of the company for
purposes of paragraph (D)(2) of this rule whenever it is shown that:
(a) The agent is appointed by the company and
has solicited
or sold
or negotiated insurance to the insured or
potential insured on behalf of the company;
and
or
(b) The agent is not appointed by the
company, or has been terminated as an agent of the company, but has been given
or permitted to retain copies of the company's applications, receipts, rate
books, or other supplies and has solicited and sold insurance coverage to the
insured or potential insured who has justifiably relied on the agent's apparent
authority to act on behalf of the company.
The company
shall not be deemed to be responsible for such agent's conduct, for the
purposes of this rule, if it has made a good faith effort to recover its
applications, receipts, rate books or other supplies.
The company shall not be deemed to
be responsible for such agent's conduct, for the purposes of this rule, if it
has made a good faith effort to recover its applications, receipts, rate books
or other supplies. If the company is unable to recover such supplies, it will
not be deemed to be responsible for such an agent's conduct if it notifies
insureds or potential insureds by publication in a newspaper of general
circulation in the county of the agent's principal place of business, that the
agent is not authorized to represent the company.
(E) Severability
If any paragraph, term or provision of this rule is adjudged
invalid for any reason, the judgment shall not affect, impair or invalidate any
other paragraph, term or provision of this rule, but the remaining paragraphs,
terms and provisions shall be and continue in full force and effect.
Notes
Ohio Admin. Code
3901-5-12
Five Year Review (FYR) Dates:
11/30/2021 and
08/31/2026
Promulgated
Under:
119.03
Statutory Authority:
3901.041
Rule Amplifies:
3901.041,
3905.14,
3905.85(D)
Prior Effective Dates:
11/30/1981, 04/05/2007, 11/11/2011,
11/03/2016
Effective: 11/3/2016
Five Year Review
(FYR) Dates: 08/19/2016 and
08/19/2021
Promulgated
Under: 119.03
Statutory
Authority: 3901.041
Rule
Amplifies: 3901.041,
3905.14,
3905.85(D)
Prior Effective Dates: 11/30/1981, 4/5/2007,
11/11/2011
