1.3 License Maintenance and Continuing Education

License Term and the Birth-Month Renewal Cycle

Alabama licenses do not all expire on the same date. Each license runs a 2-year term that ends on the last day of the licensee's birth month. The even/odd rule decides which year:

• Born in an even year → renew in even-numbered years
• Born in an odd year → renew in odd-numbered years

So a producer born in March 1990 renews every even year by March 31. Build your CE plan around your birth month, not a calendar year-end.

Exam Trap: Renewal is tied to birth month and birth year (even/odd) — not to the anniversary of when the license was issued. Watch for distractor answers that say "renew every December 31."

Continuing Education

The standard Alabama producer requirement is 24 hours of CE every 2-year term, including 3 hours of ethics.

A producer or Service Representative completes 12 hours including 2 ethics only when all three conditions apply:

1. The licensee is employed by another producer or insurer.
2. The licensee works only in that employer's office.
3. The licensee is not licensed as a nonresident in another state.

CE Rules That Get Tested

• Courses must come from an ALDOI-approved provider.
• The same approved course cannot receive credit more than once in a reporting period.
• Excess hours do not carry forward.
• Required CE must be completed before renewal.
• Approved product-training courses, including qualifying LTC courses, may earn CE credit.

Exemptions

Current exemptions include qualifying limited-line licenses, newly licensed producers and Service Representatives during their first 12 months, and qualifying nonresidents who satisfy reciprocal home-state CE. Separate grandfathered exemptions survive only when they existed before January 1, 2013 and continue without a disqualifying lapse or change. The grandfathered categories include, among others, a person who before that date was at least 60 and had been Alabama-licensed for 15 years, or already held a listed professional designation.

Renewal Steps

1. Complete the CE required for the applicable license status before the birth-month deadline.
2. Submit the renewal through NIPR or ALDOI and pay the renewal fee.
3. Confirm that the approved provider reported the credits before renewal.

Reporting Changes — the 30-Day Rule

Producers must notify ALDOI within 30 days of:

• Change of business or residence address
• Change of legal name
• Administrative action taken by another state or financial regulator
• Criminal prosecution (charges or convictions) in any jurisdiction

Failure to report is itself a violation that can support discipline.

Disciplinary Actions

Common Violations

• Misrepresentation or twisting/churning in sales
• Commingling premium funds with personal funds
• Acting outside the licensed line or selling for an unappointed insurer
• Failing to meet CE or the 30-day reporting duty
• A felony involving dishonesty (triggers federal 1033 issues)

Exam Tip: Suspension is temporary; revocation is permanent. After revocation a producer typically cannot reapply until a Commissioner-set waiting period passes and must re-qualify entirely.

Lapse, Reinstatement, and Re-Examination

What happens when a producer misses the deadline depends on how long the license has been expired:

The practical lesson: a forgotten birth-month deadline is expensive. CE completed after expiration does not retroactively cure the lapse. There is also no carry-forward, so a producer who banked extra hours one term starts the next term at zero.

Unfair Trade Practices to Recognize

Many maintenance-section questions are really ethics/unfair-practice questions in disguise. Memorize these defined terms from Title 27:

• Twisting - using misrepresentation to induce a client to lapse or replace an existing policy to their detriment.
• Churning - replacing policies to generate new commissions, often using the same insurer's existing cash values.
• Rebating - giving any part of the premium or anything of value not stated in the policy as an inducement to buy. Alabama treats unauthorized rebating as a prohibited practice.
• Misrepresentation / false advertising - any untrue statement about policy terms, dividends, or an insurer's financial condition.
• Defamation - false statements harming an insurer's reputation.
• Commingling - mixing client premium funds with the producer's personal or business funds; premiums are held in a fiduciary capacity.

Fiduciary Duty

A producer who collects premiums holds them in trust for the insurer. Spending or borrowing those funds is commingling/conversion and a fast path to revocation, even on a first offense.

Quick Compliance Checklist

1. Track your birth-month deadline and even/odd year.
2. Complete the CE required for your category; a standard producer completes 24 hours (3 ethics) from approved providers, with no repeats.
3. Renew via NIPR and pay the fee before expiration.
4. Report address, name, criminal, and administrative-action changes within 30 days.
5. Keep premium funds segregated; never rebate or twist to close a sale.

Exam Tip: If a question describes an agent persuading a client to drop a perfectly good policy for a new one that mainly benefits the agent, the answer is twisting (with misrepresentation) — distinct from a lawful, properly disclosed replacement.