Key Takeaways
- Montana producers must act in the best interest of clients
- Producers must disclose compensation arrangements and conflicts of interest
- Trust funds and premiums must be handled according to strict requirements
- Producers must maintain accurate records
- Continuing education requirements apply
Last updated: January 2026
Producer Conduct and Fiduciary Duties
Montana insurance producers have legal and ethical obligations to their clients and the public.
Producer Duties
Insurance producers owe duties to their clients:
Key Duties
| Duty | Description |
|---|---|
| Loyalty | Put client's interests first |
| Disclosure | Reveal all material information |
| Competence | Maintain professional knowledge |
| Confidentiality | Protect client information |
| Good Faith | Act honestly in all dealings |
Disclosure Requirements
Montana producers must disclose:
Compensation Disclosures
- Method of compensation (commission, fee, both)
- Material conflicts of interest
- Ownership interests in recommending insurers
- Referral arrangements
Product Disclosures
- All material terms and conditions
- Limitations and exclusions
- Premium and cost information
- Comparison with alternatives when replacing
Handling of Funds
Producers must handle premiums and client funds according to strict rules:
Premium Collection
| Requirement | Rule |
|---|---|
| Deposit | Promptly to insurer or trust account |
| Commingling | Cannot mix with personal funds |
| Trust Account | Required for holding premiums |
| Records | Must maintain detailed records |
Consequences of Mishandling
| Consequence | Detail |
|---|---|
| License Suspension | Immediate suspension pending investigation |
| License Revocation | Permanent loss of license |
| Restitution | Must repay all misappropriated funds |
| Civil Liability | Subject to lawsuits from harmed parties |
| Criminal Charges | Potential felony prosecution |
| NIPR Reporting | Reported to NIPR and other states |
Record Keeping Requirements
Montana requires producers to maintain records:
| Record Type | Retention Period |
|---|---|
| Applications | As required by insurer/law |
| Policy Documents | Per regulatory requirements |
| Correspondence | As required |
| Replacement Documents | Per replacement regulations |
| Commission Records | As required |
Insurance Fraud
Montana prosecutes insurance fraud under MCA Title 45 (Crimes):
Types of Insurance Fraud
| Type | Description |
|---|---|
| Application Fraud | False statements on applications |
| Claims Fraud | Exaggerated or fabricated claims |
| Premium Fraud | Non-payment or diversion of premiums |
| Agent Fraud | Misappropriation, forgery, unauthorized policies |
Fraud Reporting
| Obligation | Requirement |
|---|---|
| Insurers | Must report suspected fraud to CSI |
| Producers | Should report suspected fraud |
| Immunity | Good faith reporters have civil immunity |
Continuing Education
Montana requires producers to complete continuing education for license renewal. Contact CSI for current requirements.
Test Your Knowledge
What is the consequence of a Montana producer commingling client funds with personal funds?
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D