When dealing with the North Carolina Department of Insurance, it’s important to understand the potential outcomes of a complaint. The consequences can vary widely, from a simple dismissal to a complete revocation of your license. This blog breaks down these outcomes, offering insights into what you might expect if you’re facing a complaint.
The North Carolina Department of Insurance was created under Chapter 58 of the North Carolina General Statutes. Within this framework, various articles and sections detail the potential penalties that insurance producers, agents, and brokers may face. Specifically, Article33 and Article 2 of Chapter 58 outline the actions that can be taken against a licensee for violations of the statutes or administrative codes.
While the most favorable outcome of a complaint is a dismissal, it’s essential to note that this is a rare occurrence. When a complaint is filed, the Department conducts a thorough investigation. If they determine that the complaint lacks validity, they will dismiss it. However, be prepared, as most investigations do not end in dismissal.
Written Warnings: A Gentle Nudge
A step above dismissal is the written warning. This outcome typically arises when there is a technical violation of a statute or administrative code, but no harm was caused to the public or the insurance industry. In such cases, the Department may issue a written warning, essentially a letter outlining the violation and advising the licensee not to repeat the mistake.
The advantage of a written warning is that it is not classified as an official action. This means it won’t be reported to the National Insurance Producer Registry (NIPR), which is a significant relief for those concerned about their reputations and future job prospects in the insurance industry.
Monetary Penalties and Fines
Moreover, North Carolina General Statute 58-33-110 outlines specific violations, such as signing blank policies. This particular act is considered a level three misdemeanor and can result in criminal prosecution, with fines ranging from $1,000 to $5,000. It’s important to avoid such violations, as they can lead to severe repercussions.
In some cases, a voluntary surrender of your license may be offered as an alternative to suspension. However, this is a more drastic measure, as it effectively ends your ability to operate as an insurance producer. A voluntary surrender can be permanent, meaning you would have to reapply for your license after a set period, and there’s no guarantee you’ll be granted it again.
The most severe outcome of a complaint is revocation. If your license is revoked, you can no longer engage in any activities requiring a license in North Carolina. This outcome is akin to a death penalty for your career in insurance. If the Department is unwilling to negotiate or find a solution, you may have to endure a hearing and hope for the best.
Interestingly, during the process leading to a potential revocation, your license remains unencumbered. This means you can continue to operate until a formal decision is made. However, if a summary suspension is imposed due to egregious conduct that threatens public safety, your license could be suspended immediately without a prior hearing.
Facing a complaint with the North Carolina Department of Insurance can be daunting. It’s essential to gather all relevant information and documentation related to the complaint. Consider consulting with a legal professional who handles North Carolina Insurance License Defense Law to guide you through the process.
Additionally, understanding the specific statutes or codes you’re accused of violating can greatly aid your defense. The Department’s own website offers resources and information that can help clarify the situation.
*Nothing in this blog establishes an attorney-client relationship. Nothing in this blog is legal advice. If you have any questions, please check out our other blogs and our Youtube channel. You can also call us at 919-521-8810 with questions.