1.2 Michigan Producer Licensing Requirements

Pre-Licensing Education

Michigan requires DIFS-approved pre-licensing education before you may sit for the state exam. The structure is per line of authority — each line is 20 hours, broken into:

• 14 hours of subject-specific insurance content, plus
• 6 hours of ethics and Michigan insurance law.

A combined Life, Accident & Health producer therefore completes 40 total hours (one 20-hour Life line + one 20-hour Accident & Health line).

Rules that get tested:

• Courses must be completed at a DIFS-approved provider (classroom or online).
• You must hold the Certificate of Completion before you test — if you sit for the PSI exam without it, your results are invalidated.
• Pre-licensing covers both general insurance principles and Michigan-specific law from MCL 500.

The State Examination (PSI)

Michigan's current testing vendor is PSI Services. You schedule directly with PSI after finishing your course. Note that life and health are separate exams with different passing scores — this is the single most common Michigan licensing fact candidates get wrong.

Exam trap: Many states use a flat 70%. Michigan does not for these lines — Life is 72% and Accident & Health is 76% (the highest cut score of the three Life/Health exams). An answer choice of "70% for all lines" is wrong for Michigan.

Test-Day Procedure

1. Complete pre-licensing education and obtain the Certificate of Completion.
2. Schedule the exam online with PSI and pay the exam fee (approximately $41).
3. Arrive at a PSI testing center with valid government photo ID (driver's license, state ID, passport, or military ID).
4. Take the closed-book, computer-based exam; results are reported immediately at the center.
5. Retakes: there is no mandatory waiting period, but you pay the exam fee again each attempt.

Background Review (No Fingerprinting)

This is a key Michigan distinction. Michigan does NOT require fingerprint-based background checks for insurance license applicants — unusual among states. Applicants must still disclose criminal history on the application and pass a background review, but there is no FBI fingerprint card step like many other states impose.

Factors DIFS weighs when criminal history is disclosed:

• Crimes involving fraud, dishonesty, or breach of trust (most serious).
• Felonies substantially related to insurance or financial activities.
• Time elapsed since the offense and evidence of rehabilitation.
• Misrepresentation on the application itself (a violation independent of the underlying offense).

Note: A criminal record does not automatically bar licensure. Under federal law (18 U.S.C. §1033), however, anyone convicted of a felony involving dishonesty or breach of trust generally needs written consent (a 1033 waiver) to work in insurance — a frequent exam point.

Applying for the License

After passing, apply electronically through NIPR (National Insurance Producer Registry) / the DIFS online system:

1. Submit the application with exam results attached.
2. Pay the license fee (approximately $10 for a resident producer license).
3. Disclose background information for DIFS review.
4. Receive the license once DIFS approves the application.

Resident vs. non-resident: Michigan residents hold a resident license; producers licensed in another state obtain a non-resident license. Michigan participates in reciprocity, so a non-resident who is in good standing in their home state generally is not required to retake the exam.

Appointment: License Versus Authority to Sell a Company's Products

Passing the exam and holding a license is only half the picture, and the exam tests the distinction sharply. A license grants you the legal authority to transact a line of insurance in Michigan. An appointment is a separate authorization from a specific insurer allowing you to represent that company and sell its products. You can be fully licensed yet legally unable to write a particular carrier's policies until that carrier appoints you.

Worked example: Maria passes the Life exam, receives her Michigan resident Life license, and signs a contract with Acme Life. Acme must file her appointment with DIFS before she solicits Acme policies. If Maria sells an Acme annuity before the appointment is on file, she has transacted without proper authority — a Code violation — even though her license is valid. When an Acme terminates her, it files a termination of appointment; if the termination is for cause (fraud, misappropriation), the insurer must report the reason to DIFS.

The Federal 1033 Layer

Because insurance is interstate commerce, a federal statute sits on top of Michigan's licensing rules. Under 18 U.S.C. §1033, anyone convicted of a felony involving dishonesty or breach of trust is prohibited from working in the business of insurance unless they obtain written consent — a "1033 waiver" — from the appropriate insurance regulator. This applies regardless of how DIFS otherwise weighs the offense.

So a question that says "the applicant's old fraud felony is irrelevant because Michigan does not auto-disqualify" is a trap: Michigan may not auto-disqualify, but the 1033 consent requirement still controls before that person can be licensed or employed.

Quick Reference: Getting Licensed in Order

1. Education — 20 hours per line (14 content + 6 ethics/MI law); 40 for combined L&H.
2. Exam — PSI, 100 questions, 2 hours; pass Life (16-65) at 72% or A&H (16-66) at 76%.
3. Apply — through NIPR/DIFS, pay ~$10 resident fee, disclose background.
4. Appointment — obtain a carrier appointment before selling that carrier's products.
5. Maintain — complete CE and renew on the birth-month cycle (Section 1.3).