RESCINDED AND INOPERATIVE

To:           All insurance companies authorized to provide or transact insurance in Missouri

From:      Keith A. Wenzel, Director of Insurance, State of Missouri

Re:          Sections 375.022 and 375.061, RSMo (Designation of Agencies, Appointment of Agents  and Termination of Appointments)

Date:       March 22, 2000

This Bulletin is intended to answer existing questions regarding designation of agencies, appointment of agents and termination of appointments pursuant to sections 375.022 and 375.061, RSMo.

Designation Of Agencies, Appointment Of Agents and Termination Of Appointments

1. How should an insurance company designate an agency pursuant to section 375.022, RSMo? By sending written notification of the designation to the department on company stationary with the following information:

• the full name of the insurance company;
• the Missouri identification number of the insurance company;
• the full name of the agency;
• the license number of the agency; and
• the effective date of the designation.

2. What will be the effect of such designation? All agents listed by the agency on the records provided to the department pursuant to section 375.061,RSMo will be deemed automatically appointed by the insurance company to act for the insurance company in the lines for which the agent is licensed.

3. Who should pay the statutory fees for appointing the agents? The insurance companies. The department will continue to send quarterly invoices to the insurance companies for all agent appointments ( including automatic appointments as described in paragraph #2 above) and terminations.

4. Should insurance companies pay an appointment fee for designating an agency pursuant to section 375.022, RSMo? Yes. The departments quarterly invoices will include a $10.00 fee for each agency designation filed by an insurance company during the previous quarter.

5. What if an insurance company files an agency designation with the department but the agency fails to notify the department of one of the agency's agents pursuant to section 375.061, RSMo resulting in a lack of notification to the department of the agent's appointment? The agency would be in violation of section 375.061,RSMo for failing to notify the department of the agent's status and the insurance company would be in violation of section 375.022, RSMo for failing to notify the department of the agent's appointment.

6. If an agent has already been appointed by an insurance company, will the agent be viewed by the department as being appointed a second time if such insurance company subsequently designates the agent's agency pursuant to section 375.022, RSMo? No. The department will not consider such previous appointees as being "deemed appointed" by a subsequent designation of agency since such previous appointees have already been appointed.

7. Does section 375.022, RSMo require insurance companies to make agent appointments by designating agencies? No. Insurance companies may continue to make agent appointments just as they have done in the past by appointing individual agents without designating an agency.

8. Should insurance companies maintain at their respective home offices current lists of all agency designations made pursuant to section 375.022, RSMo and all agents appointed as a result of such agency designations? Yes. Such lists should be kept current and made readily available by insurance companies to authorized department personnel upon request.

9. How should an insurance company terminate an agency pursuant to section 375.022, RSMo? By sending written notification of the termination to the department on company stationary with the following information:

• the full name of the insurance company;
• the Missouri identification number of the insurance company;
• the full name of the agency;
• the license number of the agency; and
• the effective date of the termination. (When an insurance company terminates an agency, the appointments of all agents "deemed appointed" by the insurance company's previous designation of agency will also terminate and the insurance company will be invoiced at the end of the quarter for all of the terminations, i.e., agency and agents.)

10. Who is responsible for notifying the department of the termination of an agent's appointment?

• If the agent was individually appointed by an insurance company, the insurance company must so notify the department.
• If the agent was "deemed appointed" by an insurance company as a result of an agency designation, the appointment may not be terminated by the agency unless the agent resigns from or is terminated by the agency, at which time the agency must so notify the department.

11. What happens to an agent's appointment if the agent resigns from or is terminated by an agency which was previously designated by an insurance company?

• If the agent was individually appointed by the insurance company prior to the agency designation, the appointment will not terminate and may not be terminated by the agency.
• If the agent was "deemed appointed" by the insurance company as a result of the agency designation, the appointment will terminate and the agency must notify the department of such termination.

12. May an insurance company terminate the appointments of agents who are employed by an agency and who were "deemed appointed" when the insurance company earlier designated the agency? No. The insurance company must terminate the agency in order to terminate the appointments of such agents.

13. May an agency terminate the appointments of agents who are employed by the agency but who were individually appointed by an insurance company prior to the agency being designated by the insurance company? No. The appointments of such agents must be terminated by the insurance company.

Any additional questions regarding the above may be directed to the department's Licensing Section at 573-751-3518.