New Hampshire Producer Responsibilities

New Hampshire insurance producers hold positions of trust and must maintain high ethical and professional standards.

Fiduciary Duties

Core Responsibilities

New Hampshire producers are fiduciaries with duties to:

Premium Handling

Producers handling premiums must:

Trust Account Requirements:

• Maintain separate trust account for client funds
• Never comingle client funds with personal funds
• Remit premiums to insurers promptly
• Account for all funds accurately
• Maintain detailed records

Timely Remittance:

• Forward premiums within established timeframes
• Cannot use client funds for personal purposes
• Cannot "borrow" from premium accounts
• Must have written procedures for premium handling

Record Keeping:

• Maintain records for at least 5 years
• Include all premium transactions
• Document all client communications
• Preserve policy applications and documents

Exam Tip: New Hampshire requires producers to maintain insurance records for at least 5 years. This includes applications, policies, premiums, claims, and correspondence.

Prohibited Practices

Misrepresentation

Definition: Making false or misleading statements about insurance products or coverage.

Examples:

• Exaggerating policy benefits
• Minimizing exclusions or limitations
• Falsely stating coverage includes items it excludes
• Misrepresenting insurer financial strength
• Misleading about policy costs or terms

Penalty: License suspension or revocation, fines, restitution to harmed parties

Rebating

Definition: Offering valuable consideration not specified in the policy as an inducement to purchase insurance.

Examples of Illegal Rebating:

• Offering to share commission with applicant
• Providing cash payments outside policy terms
• Giving valuable gifts or services
• Offering to pay part of premium
• Providing discounts not approved by insurer

Legal vs. Illegal:

Penalty: Mandatory license revocation, fines up to $2,500 per violation

Exam Tip: Rebating is STRICTLY PROHIBITED in New Hampshire. Producers cannot share commissions or offer valuable consideration beyond what's specified in filed policies. This is one of the most serious violations.

Twisting

Definition: Misrepresenting facts to induce a policyholder to replace existing coverage with new coverage to the detriment of the policyholder.

Elements of Twisting:

1. Misrepresentation or incomplete comparison
2. Intent to induce policy replacement
3. Financial harm to policyholder
4. Benefit to producer (new commission)

Examples:

• Exaggerating benefits of new policy while minimizing existing policy benefits
• Failing to disclose new waiting periods or exclusions
• Overstating problems with current coverage
• Understating costs of replacement policy
• Concealing surrender charges or policy loans

Penalty: License revocation, fines, restitution, possible criminal charges

Unfair Discrimination

Definition: Making distinctions between insureds not based on legitimate risk factors.

Prohibited Discrimination Based On:

• Race, color, national origin
• Religion or creed
• Sex or gender identity
• Marital status
• Sexual orientation
• Disability (unless legitimate risk factor)
• Genetic information

Permitted Risk-Based Distinctions:

• Driving record (for auto insurance)
• Claims history
• Credit-based insurance score (where allowed)
• Property condition
• Business type
• Legitimate actuarial factors

Penalty: Fines, license suspension, remediation requirements

Disclosure Requirements

Material Information

Producers must disclose:

Application Process

Accurate Applications:

• Record applicant statements accurately
• Never alter applicant responses
• Have applicant review and sign application
• Disclose all material facts to insurer
• Do not omit requested information

Material Facts: Information that would affect:

• Insurer's decision to issue coverage
• Premium charged
• Terms and conditions offered
• Coverage exclusions or limitations

Producer Compensation

New Hampshire requires disclosure of:

• Producer is compensated by commission (if asked)
• Approximate commission percentage (upon request)
• Any contingent commissions or bonuses (if material)
• Ownership interests in insurers (if applicable)

Exam Tip: While producers must disclose compensation upon request, New Hampshire does not require upfront disclosure of exact commission amounts unless specifically requested by the client.

Advertising Standards

Truthful Advertising

All producer advertising must be:

Prohibited Advertising Practices

Cannot:

• Make false or misleading statements
• Use misleading testimonials
• Disparage competitors unfairly
• Use terms like "free" misleadingly
• Imply government endorsement
• Guarantee future results
• Misrepresent policy terms

Must:

• Identify producer and insurer clearly
• Disclose material limitations
• Use current, accurate information
• Follow insurer advertising requirements
• Maintain copies of advertisements (5 years)

Complaints and Investigations

Complaint Process

When NHID Receives Complaint:

1. Initial Review (within 7 days)

   • Determine jurisdiction
   • Assess seriousness
   • Assign to investigator

2. Investigation (30-90 days)

   • Request producer response
   • Gather evidence and documents
   • Interview parties
   • Review applicable laws

3. Resolution

   • Dismiss if no violation found
   • Informal resolution/consent order
   • Formal disciplinary action
   • Referral for prosecution (if criminal)

Producer's Rights

During investigation, producers have right to:

• Notice of complaint/allegations
• Opportunity to respond in writing
• Review evidence against them
• Representation by attorney
• Hearing before final discipline
• Appeal adverse decisions

Disciplinary Actions

Types of Violations

Disciplinary Penalties

Fine Schedule

New Hampshire imposes fines based on violation severity:

Exam Tip: New Hampshire law allows fines up to $2,500 per violation. Willful violations and patterns of misconduct result in enhanced penalties and mandatory restitution to harmed consumers.

Grounds for License Denial, Suspension, or Revocation

Automatic Disqualifications

License will be DENIED or REVOKED for:

Discretionary Grounds

License MAY be denied, suspended, or revoked for:

• Twisting or churning policies
• Unfair discrimination
• Failure to maintain CE requirements
• Operating without proper authority
• Failure to respond to Department inquiries
• Demonstrating untrustworthiness
• Violating insurance laws or regulations
• Aiding unlicensed activity

Best Practices for Producers

Professional Standards

Always:

• Put client interests first
• Disclose material information fully
• Recommend suitable coverage
• Document all client interactions
• Handle premiums promptly and accurately
• Maintain continuing education current
• Follow all insurers' guidelines
• Keep detailed records (5+ years)

Never:

• Misrepresent coverage or costs
• Pressure clients into unsuitable coverage
• Share commissions (rebating)
• Twist or churn policies for commission
• Comingle client funds with personal funds
• Engage in unfair discrimination
• Operate without proper licenses/appointments

Client Service Excellence

Exam Tip: New Hampshire expects producers to act professionally even beyond specific legal requirements. General principles of good faith, fair dealing, and client-first service are enforceable standards.

Reporting Requirements

Change of Address

Producers must report address changes:

• Within 30 days of change
• Through NIPR system
• For both business and residence addresses
• Failure to report may result in missed communications

Criminal Convictions

Producers must report:

• Any felony conviction
• Misdemeanors involving dishonesty or breach of trust
• Within 30 days of conviction
• Failure to report is grounds for revocation

Disciplinary Actions

Producers must report disciplinary actions:

• License actions in other states
• Regulatory sanctions
• Criminal charges filed
• Within 30 days of action/charge
• Failure to report triggers automatic investigation

Administrative Penalties

Failure to report required information:

• Fine up to $2,500
• License suspension
• Additional disciplinary action
• Investigation costs assessment

Exam Tip: Producers must report changes of address, criminal convictions, and disciplinary actions within 30 days. Failure to report is itself a violation subject to fines and license suspension.