On January 8, 2015, the Division of Insurance Hearing Officer Stephen M. Sumner entered an Order under General Laws Chapter 175, § 177E against Daniel Marechal suspending his insurance producer license and prohibiting Mr. Marechal “from directly or indirectly transacting any insurance business or acquiring, in any capacity whatsoever, any insurance business in the Commonwealth of Massachusetts.”
The order was to continue in effect “until such time as he has demonstrated to the satisfaction of the Commissioner that he has complied with all of the requirements of § 177E (H) and 211 CMR 50.00 et seq.
Failure to comply with continuing education requirements
The statute and regulation in question, M.G.L. c. 175, § 177E and 211 CMR 50.00 to 50.08 provide, as amended, that all persons licensed after April 4, 1983 must fulfill an annual continuing education requirement. This requirement presently consist of 60 hours of continuing education during the first 36 months of licensure and 45 hours of continuing education for each 36 month period thereafter. Also since September 2014, three hours of the continuing education must include a program of instruction or seminar on ethics.
Before his suspension Mr. Marechal had been licensed by the Division Marechal by the Division since 1987. He had renewed his insurance producer license on March 26, 2012, and his insurance producer license was still active at the time it was suspended on January 8, 2015.
Division’s requests for compliance before complaint filed and license suspended
Following Mr. Marechal’s March 2012 license renewal, an investigator from the Division’s Special Investigations Unit sent a letter to Mr. Marechal in April 2012, about his failure to complete the proper number of continuing education credits required by §177E(H) and 211 CMR 50.00 et seq.
Apparently no response from Mr. Marechal was forthcoming because in October of the same year the Division notified Mr. Marechal he was still not compliant with his continuing education requirement and advised him that if he did not come into compliance within 60 days of the Division would file an Order to Show Cause why his license should not be suspended.
In May of 2013, the Division made good on its threat and filed an Order to Show Cause against Mr. Marechal for not completing the number of continuing education credits required by statute and regulation.
In February 2013, when Mr. Marechal did not file an Answer to the Division’s complaint, the Division filed a motion for entry of default against Mr. Marechal.
Before that default motion could be acted upon by the hearing officer, the Division requested, and the hearing officer granted, a continuance based upon Mr. Marechal’s agreement that by October 2014, he would satisfy his continuing education requirement.
After it became apparent that Mr. Marechal had not complied with his agreement to fulfill his continuing education requirements as agreed, the hearing on his default was rescheduled for January 7. 2014.
Mr. Marechal did not appear at the January 7 hearing and Hearing Officer Summers entered the Order suspension orders against Mr. Marechal for his failure to
Lesson learned
Based on the history in the decision, the Division appears to have given this licensee every opportunity to comply with his continuing education requirements over a period of more than two years before taking action to suspend his license.
The case is interesting because it shows that the Division cut a lot of slack to allow this producer to comply with his continuing education requirement. However, as is apparent from this decisions, the Division will only go so far before it will take action against a licensee for a failure to comply with the statutory continuing education requirements of M.G.L. c. 175, § 177E.
In this case the Division could only suspend the license pending compliance, in the future the Division will have the additional power to fine a licensee who fails to comply with his or her continuing education requirement.
No fine allowed in this case but the commissioner can now fine for continuing education violations.
The order against Mr. Marechal stated in part that “any and all insurance licenses issued to Daniel Marechal… are hereby suspended… until such time as [Mr.] Marechal shall have …complied with all of the requirements of [ continuing education]…”
The order did not impose any fine. However, future licenses should note that Mr. Marechal’s failure to satisfy his continuing education requirements arose before a new law granted the Commissioner the power to impose civil fines of up to $100 for each hour of continuing education a licensee has failed to complete.
Based upon the continuing education law’s amendment, new licensees who do not comply with the continuing education law could theoretically face maximum fines of $6,000. Licensees who have renewed their initial licenses and have the lesser requirement of 45 continuing education hours would still face the possibility of a $4,500 civil fine if they totally ignored their continuing education requirements.
The amendments that added an ethics requirement and gave the commissioner the authority to impose fines took effect on September 17, 2014. See Agency Checklists “New Law Allows Mass. Commissioner To Fine For Failure To Finish Continuing Education Requirements.”
A copy of the Marechal decision is available here: Division of Insurance v. Daniel Marechal.
