Regulatory Compliance Matters

Insurance disputes are not limited to agents or brokers being sued by policyholders who allege various Errors and Omissions including negligence, fraud, misrepresentation and the like, but also involve agents and brokers who, being subject to state regulatory agencies, are subject to enforcement and disciplinary proceedings.

In Michigan, the Department of Insurance and Financial Services [DIFS] is, among other matters, the agency entrusted with the enforcement of the Michigan Insurance Code, pursuing insurers and agents/brokers to ensure compliance with the various statutes, rules and regulations governing the course of conduct of the insurance industry. The DIFS is also charged with ensuring compliance in various financial industries.

The process, from the perspective of the DIFS, begins with a complaint, followed by an investigation, frequently resulting in the issuance of a NOSC – Notice of Opportunity to Show Compliance. This is, simply, a formal complaint issued by the DIFS alleging various compliance failures and conduct contrary to the Insurance Code. The time to retain competent counsel familiar with regulatory, compliance and disciplinary matters involving the DIFS is when you receive notice of a complaint and investigation – and do so immediately! Being proactive is always more advantageous than being reactive.

Too often agents or brokers believe they are better served going it alone, without counsel, waiting until they receive the formal NOSC to do so. It is always better, however, to be proactive rather than reactive, and the longer the delay in retaining counsel the more an uphill battle must be waged. To the extent possible, you want to control the matter, and waiting until you receive the NOSC reduces some of your ability to do so.

If you are the subject of an investigation concerning regulatory and compliance matters, or if you have received a formal NOSC, call me immediately. The longer you delay, the more difficult your defense will be.