Ohio's insurance law is in Title 39 of the Ohio Revised Code (R.C.), with agent licensing in Chapter 3905 and unfair trade practices in sections 3901.19 to 3901.26. The Department's rules are in Chapter 3901 of the Ohio Administrative Code (O.A.C.). Ohio statutes call a licensed producer an "agent." This guide covers the Ohio rules on the regulator, licensing, appointments, continuing education, conduct, fraud, privacy and the guaranty associations, with citations. The general concepts are in the national Insurance Regulation guide.

About the exam

Ohio's licensing exams are given by PSI. 70% passes. Ohio sells single-line and combined exams.

• Prelicensing education: 20 hours of approved education for each line applied for, before taking that line's exam (R.C. 3905.04(C)(1)(c); O.A.C. 3901-5-09(D)). A bachelor's or associate's degree in insurance, or an approved professional designation, can take its place.
• Course certificates and education waivers are good for 180 days. A candidate who hasn't passed within that time retakes the course.
• The license application is filed only after all required exams are passed, and within 180 days of passing, with an extension for deployed service members (O.A.C. 3901-5-09(D)(3)).

The regulator

• The Ohio Department of Insurance is headed by the Superintendent of Insurance, its chief executive officer, who must see that the insurance laws are enforced (R.C. 3901.011). The Superintendent is appointed by the Governor with the Senate's advice and consent and serves at the Governor's pleasure (R.C. 121.03).
• The Superintendent adopts rules (R.C. 3901.041) and can require reports, subpoena witnesses and records, and refer criminal matters to prosecutors. Sentencing is for the courts (R.C. 3901.04).
• Domestic insurers are examined at least once every three years, which may be deferred up to five years, at the insurer's expense (R.C. 3901.07).
• Retaliation: when another state burdens Ohio insurers with taxes or fees, Ohio imposes the same on that state's insurers and agents (R.C. 3901.86).

Who needs a license

• No one may sell, solicit or negotiate insurance without a license (R.C. 3905.02). Unlicensed activity is a first-degree misdemeanor (R.C. 3905.99(D)).
• Lines of authority (R.C. 3905.06(B)): life, accident and health, property, casualty, personal lines (property and casualty sold to individuals and families for noncommercial purposes), and variable life and variable annuity, which also requires FINRA registration after passing a Series 6, 7, 63, 66 or other approved exam.
• Public adjusters: anyone paid to negotiate property claims for an insured needs a public insurance adjuster certificate. Ohio doesn't license independent adjusters, and adjusters representing insurers are exempt (R.C. 3951.01, 3951.02).
• Surplus lines brokers need both property and casualty licenses (R.C. 3905.30).
• Referrals: an unlicensed person may be paid for a referral only as a fixed dollar amount that doesn't depend on a purchase (R.C. 3905.18(D)).
• Commissions go only to properly licensed (and, where required, appointed) agents (R.C. 3905.18). An appointed agent may share commissions with an agent licensed for the line even if that agent isn't appointed with the insurer (O.A.C. 3901-5-09(N)). Renewal commissions may go to someone licensed at the time of sale.

Getting and keeping the license

• Requirements: age 18, U.S. citizenship or legal authorization to work, a passed exam and a criminal records check through Ohio BCI, including FBI records (R.C. 3905.051, 3905.06). A person covered by 18 U.S.C. 1033 needs written consent. A business entity designates a licensed agent responsible for its compliance.
• Term: individual licenses renew every two years by the last day of the birth month (R.C. 3905.06(C)). The Department sends a renewal notice at least a month ahead, but the agent is responsible for renewing.
• Late renewal: with a $50 late fee, before the first day of the second month after the renewal date. After that, the license is suspended for nonrenewal. The agent may apply for reinstatement within 12 months of the missed date. After that, the license is canceled and the person applies as a new agent (R.C. 3905.06(D) to (F)).
• Changes: name, addresses, email and phone within 30 days (O.A.C. 3901-5-09(D)(9); R.C. 3905.061). An agent who moves out of state and files within 30 days with the new state's certification is converted to a nonresident license with no fee.
• Assumed names: notify the Superintendent before using one (R.C. 3905.11).
• Nonresidents are licensed by reciprocity and must keep their home-state license (R.C. 3905.07). A licensee in good standing in another state who moves to Ohio and applies within 90 days skips education and exams (R.C. 3905.041).
• Temporary license: up to 180 days, for example for a deceased or disabled agent's spouse or representative, or the designee of an agent entering military service. A licensed agent or insurer must sponsor the temporary licensee (R.C. 3905.09).
• Inactive status: an agent may go inactive. All appointments become void, CE isn't required, and no licensed activity is allowed. Reactivation requires 24 CE credits (3 ethics) or a prelicensing course within the past 12 months, plus a $50 fee (R.C. 3905.16; O.A.C. 3901-5-09(L)).
• Surrender: a license can't be surrendered while the Superintendent is investigating. A surrender for cause lasts at least five years (R.C. 3905.14(E)(9), 3905.16).

Continuing education

• 24 hours every two-year renewal period for major lines, including 3 hours of ethics (R.C. 3905.481). CE must be finished before the renewal is filed.
• Carryover: excess hours up to 50% of the next period's requirement (12 hours) carry over as general credit (O.A.C. 3901-5-01(E)(7)).
• Association membership counts for no more than 4 general credits per period. Instructors get double credit, once per course per period.
• Exempt: limited lines agents and inactive agents. Nonresidents who meet home-state CE satisfy Ohio's. CE from another state doesn't transfer when someone becomes an Ohio resident agent.

Appointments and terminations

• An agent acts for an insurer, and must be appointed by it, when selling the insurer's products and being paid by it (R.C. 3905.20(A)).
• The insurer files the appointment within 30 days after the agency contract is signed or the first application is submitted, whichever is earlier. The appointment certifies that the agent is competent, financially responsible and suitable, and binds the insurer to the agent's acts within actual and apparent authority (R.C. 3905.20(B)). Variable products need a separate appointment.
• Appointments renew automatically on July 1 unless terminated (O.A.C. 3901-5-09(K)(3)).
• Termination: the insurer reports any termination to the Superintendent within 30 days of its effective date, with a statement of facts if it was for cause. It mails the agent a copy within 15 days, and the agent has 30 days to file comments. Good-faith reports are immune (R.C. 3905.21, 3905.211).

Discipline (R.C. 3905.14)

Grounds include false information on an application, misappropriating or converting premium money, fraud, and these Ohio-specific items:

• not responding in writing to a Department inquiry within 21 days;
• not submitting an application within the insurer's deadline or 7 days after taking a premium or binding order;
• having a client name the agent or a close relative as beneficiary (unless they're the insured or applicant);
• placing coverage with an insurer other than the one the applicant chose, without consent;
• not telling the client the agent isn't appointed with the insurer, or not identifying the insurer at binding;
• selling an unregulated product with insurance-like benefits without disclosing that it isn't insurance;
• using the license mainly to insure (other than life) your own property or that of relatives, employers or employees, Ohio's controlled business rule (B)(34).

Penalties: a civil penalty of up to $25,000 per violation, plus costs and other sanctions (R.C. 3905.14(E)). Selling for an unauthorized or fictitious insurer means at least a two-year suspension. Hearings follow the Administrative Procedure Act (R.C. Chapter 119). A summary suspension order sets a hearing within 15 days.

Self-reporting (R.C. 3905.22): administrative actions elsewhere within 30 days of final disposition. Criminal charges (other than minor traffic) within 30 days of the initial court appearance, and the final disposition within 30 days after it.

Agent fees: an agent may not charge a fee for taking an application or processing changes, cancellations, claims or renewals on listed personal lines, including auto, homeowners, individual life, individual health and disability. Any allowed fee must be separately disclosed, not a percentage of premium, and agreed to (R.C. 3905.55).

Unfair and deceptive practices (R.C. 3901.21)

• Misrepresentation and twisting: misrepresentations or incomplete comparisons to get someone to buy, lapse, change or surrender insurance (3901.21(A)).
• False advertising (3901.21(B)) and defamation of an insurer (3901.21(C); 3999.09).
• Unfair discrimination between people of the same class and hazard (3901.21(M)); refusals because of sex or marital status (L) or blindness (Q); asking whether an applicant is a domestic violence victim (Y); denying family coverage to a child who doesn't live with the insured (S).
• Insurance as an inducement: offering insurance to induce the purchase of another policy, or advertising it as "free" or "no cost" (3901.21(G)(2)).
• Calling a life policy or annuity a contract for funeral goods or services (3901.21(AA)).
• Charging private passenger auto rates based solely on the insured's residence (3901.21(CC)).
• Rebating: for life and health, inducements not in the contract are prohibited (R.C. 3911.20; 3901.21(G)). For property and casualty, R.C. 3933.01 bars any consideration not plainly stated in the policy. Ohio allows noncash gifts up to a yearly amount the Superintendent sets, and value-added products or services related to the coverage, if they aren't conditioned on a purchase and are offered without unfair discrimination (R.C. 3901.213).
• Enforcement: the Superintendent may issue cease and desist orders, suspend or revoke licenses and order restitution (R.C. 3901.22). A court may impose up to $3,500 per violation (capped at $35,000 in six months) and up to $10,000 per violation of a cease and desist order.

Claims practices (O.A.C. 3901-1-54)

These timelines apply to property and casualty claims:

• Acknowledge a claim within 15 days. Notice to an agent counts as notice to the insurer.
• Answer claimant communications within 15 days and Department inquiries within 21 days.
• Accept or deny within 21 days of a proper proof of loss. If more time is needed, say so within that period and update the claimant every 45 days.
• Pay within 10 days after acceptance once the amount is set.
• Warn an unrepresented claimant at least 60 days before a time limit expires.
• Actual cash value is replacement cost at the time of loss, including sales tax, minus depreciation.

Insurance fraud

• Insurance fraud (R.C. 2913.47) means presenting a statement known to be false or deceptive, with purpose to defraud, in support of an application or claim. Under $1,000 it's a first-degree misdemeanor. $1,000 to under $7,500 is a fifth-degree felony, $7,500 to under $150,000 a fourth-degree felony, and $150,000 or more a third-degree felony.
• Applications and claim forms carry a fraud warning, though a missing warning is no defense (R.C. 3999.21).
• Insurers adopt an antifraud plan within 90 days of licensure (R.C. 3999.41) and report a reasonable belief of fraud to the Department, except claims under $1,000 (R.C. 3999.42). Good-faith reporters are immune (R.C. 3999.31).

Privacy and data security

• Notice of information practices (R.C. 3904.04): at policy delivery if information comes only from the applicant or public records; otherwise when collection begins.
• An authorization for disclosure must be dated, signed and obtained within one year before the disclosure (R.C. 3904.13). Getting information under false pretenses is a fourth-degree felony (R.C. 3904.14).
• Data security (R.C. Chapter 3965): licensees keep a written information security program, notify the Superintendent within three business days of determining a cybersecurity event occurred, and keep records five years. Licensees with fewer than 20 employees, under $5 million in revenue or under $10 million in assets are exempt from the program requirement.

Guaranty associations

• Ohio Life and Health Insurance Guaranty Association (OLHIGA) (R.C. 3956.04): $300,000 in life death benefits, $100,000 in life cash value, $250,000 in annuity present value, $100,000 for other health benefits, and an aggregate cap that rises to $500,000 when major medical is involved. Using the association in sales is prohibited, and a summary document is delivered with the policy (R.C. 3956.18).
• Ohio Insurance Guaranty Association (OIGA) (R.C. Chapter 3955): up to $300,000 per claim, $10,000 for unearned premium, nothing on claims of $100 or less, no punitive damages, and nothing for insureds with net worth over $50 million. Workers' compensation isn't covered because Ohio's system is state-run.

Common exam traps

• Superintendent of Insurance, appointed by the Governor.
• Appointments: 30 days (earlier of contract or first application) and automatic renewal on July 1.
• CE: 24 hours with 3 ethics, and up to 12 extra hours carry over as general credit.
• Late renewal: $50 fee until the first day of the second month; reinstatement possible within 12 months.
• Ohio licenses public adjusters only.
• Insurance fraud becomes a felony at $1,000.