RESPONSIBILITIES OF INSURANCE ENTITIES
§ 37.61. Appointments and termination by entity.
(a) A certificate does not permit a person to act as an agent. To complete the certificate process to act as an agent, a person shall secure a written appointment from each sponsoring entity.
(1) An insurance entity shall make appointments of agents in writing to the agent.
(2) If an entity enters into a contract with the agent, the effective date of the appointment shall be the same as the effective date of the contract.
(3) An insurance entity’s appointment form shall contain at least the following:
(i) The effective date of the appointment.
(ii) The lines of authority conferred.
(iii) The name and address of the appointee, and any fictitious name currently used by appointee.
(iv) The appointee’s certificate number.
(v) The names and certificate numbers of qualifying active partners, if the appointee is a partnership, or qualifying active officers, if the appointee is a corporation.
(vi) The appointee’s Social Security number or tax identification number.
(vii) A list of companies and insurer numbers, if fleet appointment.
(4) Appointment activity by an entity for existing certificate holders shall be reported to the Department on a monthly basis. The report shall be in a format approved by the Department. The report shall be filed within 30 days of the end of the month being reported.
(5) Appointment records, including a demonstration of the reasonable inquiry conducted by the entity as required in § 37.62(b)(1) (relating to certification of appointments by entities), shall be made available for Department inspection upon demand. Both the entity and appointee shall maintain records of the appointment during the appointment period and for 5 years following expiration or termination of the appointment. The records may be maintained on a regional basis if the entity designates a single contact person for each reporting region.
(b) An entity may terminate an agent’s appointment.
(1) Terminations shall be in writing and sent to the agent prior to notification of termination to the Department.
(2) If an entity has entered into a contract with the agent, the termination date of the appointment shall be the same as the termination date of the contract.
(3) The termination notice to the agent shall contain at least the following:
(i) The name of the entity for which the agent is being terminated.
(ii) The effective date of termination.
(iii) The lines of authority terminated.
(iv) The name and address of terminated appointee, including fictitious names used by appointee.
(v) The certificate number of the terminated appointee.
(vi) The Social Security number or tax identification number of the terminated appointee.
(vii) The names of qualifying active partners or qualifying active officers, if the terminated appointee is a partnership or corporation.
(4) Termination activity by an entity shall be reported to the Department on a monthly basis. The report shall be in a format approved by the Department. The report shall be filed within 30 days of the end of the month being reported.
(5) Termination initiated by an appointee shall be confirmed by an entity in its termination form and reported to the Department as required by this section.
(6) An entity shall maintain termination records for 5 years after termination is effective.
(7) When a termination of an appointee is for cause, the entity shall document its reasons for termination to the attention of Chief, Bureau of Enforcement, Insurance Department, Harrisburg, Pennsylvania 17120.
(8) If an appointment has been terminated on the records of the Department, it may not be revived. The company shall issue a new appointment with a new effective date in the standard appointment format.
(9) An entity shall file a termination of an appointment when the agent ceases performing the activities of an agent for the entity.
(c) Appointment and termination records required under this section may be maintained in the form of electronic paperless filing systems in accordance with guidelines for record retention developed and distributed by the Department.
Cross References This section cited in 31 Pa. Code § 37.45 (relating to contractual relationship of brokers and agents); and 31 Pa. Code § 39.6 (relating to sponsors).
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