05-04 – No-Action Request for Agents of Prepaid Legal Services

The Missouri Department of Insurance was unable to issue a no-action letter for representatives of Prepaid Legal Services. Facts detailed in the no-action requests are summarized as follows: "Some Missouri producers have been contacted by representatives of Prepaid Legal Services to sell memberships in their prepaid legal service plans. As part of this arrangement, the producer will be accompanied by a Prepaid Legal Services representative to the home of an insurance customer where the representative will explain membership terms and solicit the prospective client's membership." The Department, however, was unable to issue a no-action letter on this issue because it appears the identified Prepaid Legal Services representatives must be licensed as insurance producers. Section 379.901 RSMo provides that any person who solicits memberships on behalf of a prepaid legal services plan shall be licensed as an insurance producer as provided by chapter 375, RSMo. Also pertinent is the fact that Missouri Courts have defined the term "solicit" to mean "appeal for something, to apply to obtain something; to ask earnestly or to ask for the purpose of receiving."

Accordingly, representatives of Prepaid Legal Services who solicit membership or explain coverage terms must be licensed as insurance producers even if accompanied by a licensed producer. Missouri statutes also state that insurance producers licensed with the Missouri Department of Insurance who assist in the solicitation of, or who agree to place business from, any person who is not appropriately licensed may be subject to discipline.