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Frequently Asked Questions - Producers

Q: May a producer who is meeting with a client to discuss Medicare products also solicit other products that he or she is licensed to sell, such as life or health insurance, or annuities?

A: No. Under Section 2152-B of the Insurance Code, it is an unfair trade practice to use an appointment that was made to discuss Medicare products or to solicit the sale of Medicare products in order to solicit sales of life insurance, health insurance or annuity products. There is an exception, however, for when the consumer requests the solicitation and the products to be discussed are clearly identified to the consumer in writing at least 48 hours before the appointment. Otherwise, another appointment will have to be scheduled, if life insurance, health insurance or annuities are to be discussed.

Q: If a life or health producer who does not sell, solicit, or negotiate Long Term Care Insurance (LTCI), and has not taken the required training*, refers a client to a producer who has the required training and does sell LTCI, may the LTCI producer share his or her commission with the referring producer?

A: Yes. Section 1450 of the Maine Insurance Code governs the sharing of commissions between licensed producers. The basic rule is that this is permissible as long as each producer has the proper license type. The license authorities for LTCI would be Life or Health. The training requirement does not itself constitute a different license category. Therefore, commission sharing would be permissible between these producers.

* Maine recently enacted a long term care training requirement based upon a Model Act. This law became effective September 20, 2007. This link will direct you to these provisions:

Example 1: Mary is a Maine licensed producer with Health authority. However, she has not taken Long Term Care Insurance (LTCI) training and does not sell such products. She refers a client to Bill, a Maine licensed Health producer who has completed the required training and is authorized to sell LTCI products. The client purchases a LTCI policy from Bill. Bill shares his commission with Mary. Is this allowed?

A: Yes. Commission sharing is permissible as long as each producer has the proper license type. In this case, Mary and Bill are Maine licensed Health producers.

Example 2: Lisa is a Maine licensed producer with only Property & Casualty authority. If she refers a client to Bill, under the same circumstances as above, is Bill able to share the commission from the LTCI product with Lisa?

A: No. Lisa does not hold the required Life or Health authority. Both producers must hold the appropriate authority to share in the commission.

Q: When does the Maine Insurance Code allow producers to charge fees?

A: The basic rule is that fees are not allowed. Charges for placing insurance must be as indicated in the company's filings; in other words, the regular premiums as filed, and the resulting commissions. However, there are two circumstances allowing producers to charge fees. First, producers with surplus lines authority may charge a nominal service charge in connection with surplus lines placements. Second, fees in addition to or in lieu of commissions may be charged for large commercial property and casualty risks. This category is defined in Bureau Regulation Chapter 900:

Q: Does the Maine Insurance Code allow producers to offer promotional incentives to customers?

A: No, except for those with nominal value. The anti-rebating laws generally prohibit any person from offering any inducement, discount, or incentive to purchase insurance that is not specifically included in the insurer’s filings. The exception is that a producer may offer gifts valued up to $20 per year per policy or quote in connection with the marketing of insurance, and conduct raffles or drawings with prizes valued at no more than $100, so long as there is no participation costs to entrants. These incentives may not be in the form of cash or cash equivalent.

Example 1: John has opened his new insurance agency, and wants to offer a free MP3 player valued at $24.99 to the first 50 prospective customers to visit his office for an insurance quote. May he do so?

A: No. This is a gift in connection with the marketing of insurance and its value exceeds $20.00. Therefore, this offer is prohibited under the rebating laws.

Example 2: Sue, who is an established producer, wants to reward her loyal customers by providing a yearly $15.00 gift certificate to a local restaurant to each existing policyholder. Do the rebate laws apply to this?

A: Yes. The rebate laws refer to gifts in connection with the marketing of insurance, which is further defined both in terms of the sale of policies, and the retention of existing insurance. Sue’s gifts are for the purpose of rewarding continuing business, and therefore relate to the retention of insurance. These gifts, therefore, are rebates. She is, however, allowed to offer them under the rebating laws, because their value is below $20.00 per year per policy.

Example 3: In order to promote his insurance business, William wishes to hold a drawing at a local Chamber of Commerce event. There is no charge to enter, but the winner will receive a personalized jacket worth $75.00, courtesy of “William’s Insurance Agency.” Is this allowed under the rebate laws?

A: Yes. The maximum allowable value for prizes in connection with free drawings is $100.00.

Example 4: Sarah, using a targeted mailing list, sends $5.00 checks to prospects as part of a promotional mailing encouraging them to contact her office for a quote. Is this allowed?

A: No. Even when the gift is below $20.00, the rebate laws also specify that the gift may not be in the form of cash or cash equivalent such as a check.

Q: What kind of guaranty association protections exist in Maine?

A: For many lines of insurance, policyholder protection is provided through either the Maine Insurance Guaranty Association or the Maine Life and Health Insurance Guaranty Association. Information regarding the Maine Insurance Guaranty Association can be found on the website of its administrator, Guaranty Fund Management Services, at Information regarding the Maine Life and Health Insurance Guaranty Association can be found on its website, The Maine Bureau of Insurance may be contacted by mail at 34 State House Station, Augusta, ME 04333 or by telephone at 1-800-300-5000.

Q: How do I obtain a letter of certification?

A: Letters of certification are not as common as they were in the past. Most states do not require such letters. Check with the specific state to see if a letter of certification is required. If one is needed, please submit a request in writing to the Licensing Division of the Maine Bureau of Insurance, 34 State House Station, Augusta ME 04333, along with a fee of $10. Checks should be made payable to Treasurer, State of Maine.

Q: Does the Maine Insurance Code require producers to retain records?

A: Yes. Producers must retain records for three years after completion of a transaction. The record must include the following information: name of insurer, name and address of insured, policy number, premium payable, expiration date of policy, date and time of all binders. The information must be available to the Superintendent upon request. Records may be maintained in paper or electronic form. This relates only to the Bureau’s regulatory requirement at There may be additional recordkeeping issues regarding other purposes such as tax records or a company’s particular requirements.

Q: When an individual producer leaves an agency, who is responsible for reporting the producer's change of business address?

A: The individual licensee is responsible for keeping his or her license information up to date, including any changes in address, within 30 days. Changes can be made in writing by completing the change of address form located on the Bureau's website at, under the Producer/Business Entity Information page and mailing to the Maine Bureau of Insurance, 34 State House Station, Augusta, ME 04333, or by submitting electronically using the online service available on the Bureau's website also on the Producer/Business Entity Information page.

Example: Sally has worked for Insurance Agency, Inc. for the past four years. Sally leaves Insurance Agency, Inc. to work for another firm. Sally is required to notify the Bureau of Insurance within 30 days of her address change. This is true even if the agency took care of all of her paperwork while she was employed there.



Last Updated: August 5, 2014