Insurance Regulation
The regulator and the marketplace
Insurance in Ohio is supervised by the Ohio Department of Insurance (OCI), headed by the Superintendent of Insurance. The Superintendent licenses insurers through a certificate of authority, approves policy forms (and rates where required), licenses producers, monitors solvency through examinations, and may fine, suspend, or revoke a license for unfair trade practices. Insurers are domestic (incorporated in Ohio), foreign (another state), or alien (outside the U.S.). Only authorized/admitted insurers may sell; nonadmitted coverage is limited to lawful surplus-lines placements.
License vs. appointment
These are separate. The license is issued by the state after prelicensing education and a passing exam; the appointment is granted by an insurer authorizing the producer to represent it. A producer must be appointed to submit business for a company. Ohio producers must complete continuing education each compliance period, including an ethics component. Variable products require both a life insurance license and a securities registration.
Fiduciary and prohibited practices
Premiums collected belong to the insurer or the client, must be remitted promptly, and may not be commingled with personal funds. Prohibited conduct includes rebating (offering any inducement not stated in the policy), twisting (misrepresentation to induce replacement), misrepresentation, defamation, coercion, unlicensed activity, and controlled business. The state guaranty association protects covered policyholders of insolvent insurers within statutory limits; it never covers market losses and may not be used as a sales inducement.
Traps: a question describing an inducement "not specified in the policy" is testing rebating, however generous it sounds. Questions about an agent who exceeded authority usually turn on apparent authority, which can bind the insurer even when the agent acted outside actual instructions.
Rule of thumb: if it is not in the contract, an agent cannot give it away to close a sale.