Recent research by the US Census Bureau shows that Utah is the third fastest-growing state in the country. With rising property values and increased risk from natural disasters such as wildfires, the Utah insurance industry is filled with business opportunities. Whether you're based in the Salt Lake City metropolitan area, Tooele, Provo, St. George, Ogden, Logan, or in beautiful rural Utah, you've likely seen these recent changes and increased business opportunities.
Just as how Utah has unique business opportunities, it also has unique regulations. Utah's insurance industry is one of the most heavily regulated in the nation. Violators of the insurance code often find themselves receiving fines several times higher than what they'd receive if disciplined in another state. Additionally, Utah criminalizes the intentional violation of its Insurance Code.
Whether someone is an insurance adjuster, navigator, consultant, general agent, or other insurance professional, they must comply with Utah's strict Insurance Code. Even minor miscommunications, “harmless” errors, or white lies could put insurance licenses and livelihoods at risk.
If you face disciplinary charges from the Utah Insurance Department, call the Lento Law Firm's experienced Professional License Defense Team. Our team has many years of experience defending insurance professionals from disciplinary bodies in Utah and across the country. Not only will we fight for you in court, but we can also negotiate with the insurance department to get the best possible outcome for your case, such as avoiding license suspensions and revocations or occasionally even getting the complaints dismissed outright! Call us at 888.535.3686 or message us on our online form to start defending your license today.
The Authority Over Insurance Professionals in Utah
In Utah, anyone who advertises or offers to perform any services as an insurance producer, consultant, general agent, or other similar profession requires a valid insurance license issued by the Commissioner of the Utah Insurance Department. Obtaining and maintaining a license requires one to show that they are “competent” and “trustworthy.” These broadly worded terms give the Commissioner significant amounts of power and discretion in determining who ought to be licensed.
The Insurance Department accepts complaints and accusations of fraud from anybody, including clients, competitors, co-workers, employees, supervisors, and other government bodies. Furthermore, the Department works with the National Association of Insurance Commissioners to ensure that illegal and unethical behavior can be investigated and punished on a national scale. Depending on the alleged transgression, discipline issued by the Department could range from a warning to losing your ability to work in the American insurance industry altogether.
Common Reasons a Utah Insurance Professional Faces Discipline
What qualifies as “misconduct” for Utah Insurance Professionals spans a wide spectrum. The Commissioner and the Department have a fair amount of discretion as to what makes someone untrustworthy and/or not competent to practice in the insurance industry. However, the Utah Insurance Code includes many forms of misconduct that can lead to discipline. However, since the Department has a wide latitude for decision-making, this is not a definitive list. The Insurance Code's list of misconduct includes:
- Being unqualified for a license. Failing to demonstrate or maintain trustworthiness and competence or no longer meeting the formal qualifications for licensure.
- Failure to comply with Department investigations. This includes refusing to speak with investigators or hand over subpoenaed documents and files.
- Misrepresentation or fraud. Submitting false information on policy applications, manipulating client's claims, or utilizing deceptive marketing materials.
- Providing false information on the license application. Submitting incorrect information on an application is a violation, even if it is an honest error.
- Misappropriating funds. Improperly withholding, misappropriating, or converting anything of value obtained in the course of business.
- Conviction of a crime. Being found guilty or having pled guilty to any felony, a misdemeanor involving “fraud, misrepresentation, theft, or dishonesty,” or any “violent crime.”
- Past misconduct. Admitting or being found to have committed unfair trade practices or fraud in the insurance industry. This is not limited to acts in Utah or the United States.
- Financial irresponsibility. Failure to pay employees or debts.
- Endangering the public interest. Serves as a “catch-all” for unethical, deceptive, or unscrupulous actions.
Insurance Professionals Under Investigation Need a Strong Defense
The Department is authorized to revoke, suspend for up to one year, or fine any insurance professional who exhibits almost any form of unethical behavior. Given the vast amounts of discretion that the Department and the Commissioner wield, insurance professionals need to begin their defense as soon as possible, which is critical to avoid severe penalties that can end their careers.
The Utah Insurance Department Can Inflict Severe Consequences
Running afoul of the Utah Insurance Code and the Insurance Department's administrative rules can permanently end your career in the insurance industry. However, the Commissioner and the Department's staff frequently consider the totality of the circumstances. For example, they are likely to consider the harm the alleged misconduct resulted in, your disciplinary record, and the strength of the evidence against you. The Lento Law Firm's Professional License Defense Team has the experience to demonstrate the mitigation of any alleged misconduct, challenge the evidence submitted against you, and analyze your record to persuasively argue why informal penalties or lesser sanctions would be more appropriate than suspension or revocation.
Suspension and Revocation of Insurance Licenses
Under Utah law, the Commissioner or their designees have the power to revoke or suspend licenses for nearly any violation of state law, federal law, or ethics. Suspensions can last up to one year. Reinstatement of a suspended license is not automatic. However, the attorneys at the Lento Law Firm can help negotiate a “voluntary surrender” of a license for a period of time. This method allows insurance professionals to avoid formal discipline, keep their records clean, and reinstate their licenses faster.
Revocation is a long-term, or even permanent, sanction. Typically reserved for the most egregious, harmful, and/or fraudulent actions, revocations prohibit insurance professionals from working in the insurance industry altogether. While Utah law does allow one to reapply for a license five years after revocation, former insurance professionals need to make an exceedingly strong case to demonstrate that they are competent, trustworthy, and fully rehabilitated. Reapplications following revocation are rarely successful without professional legal help.
Additionally, Utah refers fraudulent behavior to the National Association of Insurance Commissioners and is a member of the National Insurance Producer Registry (NIPR). Suspensions, revocations, or other forms of discipline received in Utah are very likely to follow you if you are licensed or apply for a license in another state.
Asset Forfeiture and Fines
Utah law allows for the Department to fine insurance professionals up to $10,000 for a violation of the Insurance Code. Continuing violations can result in penalties of up to $250,000. These fines can be imposed upon the insurance professional in their personal capacity. This means that you cannot hide behind corporate registration to avoid paying the fines.
Probation
The Department might enforce supervisory probation as an alternative to suspension. Probation can last for up to two years and can be implemented automatically if a background check comes up negative or an investigation is opened against the professional or the professional's business.
The Department has the discretion to create and enforce the terms of probation. The only requirement is that the terms must be “reasonable.” Thus, the terms of probation are tailored to the alleged misconduct. For example, someone who committed an honest mistake might have to pursue enhanced continued professional education. Meanwhile, a professional accused of fraud is likely to face much more severe restrictions. Regardless of how severe the restrictions are, violating probation is automatically considered grounds for revocation.
Collateral Consequences and the Loss of Reputation
The worst consequence suffered by most insurance professionals is not handed out by the Department or a court of law but by the court of public opinion. Being formally disciplined leaves a stain on your record. Many, if not most, consumers will question a professional's trustworthiness and competence when they discover they have been formally sanctioned. Most substantiated complaints received by the Department eventually became public records and indexed by search engines and directories. The fact that a professional was disciplined may be the first thing that shows up on a Google search.
Employers are unlikely to hire or promote insurance professionals who have been publicly sanctioned or censured. Under Utah law and the law in many states, an employer can be held responsible for the acts of an employee. Thus, if an employer thinks an applicant is likely to make mistakes or act unethically, it's unlikely they'll be hired.
Courtroom Actions
Utah is unique in that it criminalizes the intentional violation of the Insurance Code. This means that not only could a violation end your career and leave you with a large fine, but you may be facing jail time as well.Those accused of fraud also face severe potential civil penalties. An insurance professional found liable for fraud may have to pay attorney fees, the costs of investigators and other public employees, full restitution equal to the amount improperly gained, and a fine of up to three times the amount improperly sought.
The Utah Insurance Professional Disciplinary Process
Complaint Submission
The disciplinary process in Utah usually has a set process for investigating complaints. First, the complaint is forwarded to the insurance professional or firm it is filed against. This permits insurance professionals to immediately address what is alleged against them. This may include fixing anything that was done wrong, clearing up any miscommunications, or stating why their conduct was not unethical.
Insurance Division Review
The Insurance Department then reviews the complaint and the response. If the Department is satisfied, the case is closed. This can take up to four weeks. However, if the Department is not satisfied then they may launch an investigation. An investigation may consist of an audit, interview of the parties, or other actions deemed appropriate.
If the Department is not satisfied with your initial response, it is important to obtain legal counsel as soon as possible. By giving statements to investigators, you may inadvertently disclose information harmful to yourself. A simple slip of the tongue or a misunderstanding can cause a simple investigation to turn into a formal, disciplinary process. The attorneys at the Lento Law Firm can advise you on how to handle investigations and help stop you from talking yourself into trouble.
Negotiation and Potential Settlement
If the investigation finds evidence of misconduct, the Department is often able to be talked into entering a settlement and avoiding formal discipline. The Professional License Defense Team at the Lento Law Firm is experienced in negotiations with disciplinary bodies and can help insurance professionals avoid prolonged courtroom battles and discipline on their record.
Administrative Hearing
If a settlement can't be reached, the case is then heard by the Commissioner or their designated hearing officer. These hearings can be formal, technical, and full of legalese. It is crucial to have legal representation.
Appellate Judicial Review
If the administrative hearing results in an unsatisfactory outcome, the professional can appeal to the Utah Judiciary. However, the appellate court will rarely hear new evidence. Instead, the court will examine the administrative hearing for errors in legal procedure. Typically, the court will give great deference to the outcome of the administrative hearing. Therefore, successful appeals are rarely, if ever, successful if a professional does not retain legal counsel.
Trust the Lento Law Firm and Protect Your License and Reputation Today
Utah has one of the strictest Insurance Codes in the country. Even those who commit honest mistakes face having their lives turned upside down, their careers ended, and their reputation ruined. You've studied long and hard to pass exams, get licensed, and build your career. Don't risk taking on the allegations alone!
The Lento Law Firm and our Professional License Defense Team are standing by, ready to help. Our team can negotiate with regulators to help get complaints dismissed and reach favorable settlements. We can represent you every step of the way, working to keep your reputation clean and your professional life intact. Begin your defense by calling the team at 888.535.3686 or contacting us online.
