Michigan Marketing Rules, Ethics & Unfair Practices
The final state topic covers how a Michigan producer must behave in the market: the prohibited unfair practices, the duty to handle client money properly, and the advertising and disclosure standards that keep sales honest. Many of these rules come from the state's unfair trade practices law and the regulator's market-conduct rules.
Rebating, Twisting, and Churning
Rebating, offering any part of the premium or commission or other valuable consideration as an inducement to buy, is prohibited in Michigan because it creates unfair discrimination between policyholders. Twisting is using misrepresentation or misleading comparisons to induce a policyholder to drop an existing policy for a new one; churning is a similar replacement abuse within the same insurer's policies. All are prohibited.
Misrepresentation and Advertising Standards
A producer must present products accurately. Misrepresenting benefits, dividends, policy terms, or an insurer's financial condition is prohibited, and advertising and sales materials must not be false or misleading. Comparisons used to justify replacing coverage must be complete and fair, and the existence of the guaranty association may not be used as a sales inducement.
Fiduciary Duty and Handling Client Funds
Premiums a producer collects belong to the insurer or the client, not to the producer. Michigan treats this as a fiduciary responsibility: funds must be remitted properly and never commingled with the producer's own money or converted for personal use. Failing to account for premiums or misappropriating client money is grounds for discipline and can also be a crime.
Keep going: the full Michigan Life & Health Insurance Producer Exam guide covers every section of the exam. Michigan Life & Health Insurance Producer Exam — Complete Study Guide (2026) — PDF + EPUB, $19.99 · 14-day refund →
State-specific details
State exam facts
- State regulator
- Michigan Department of Insurance and Financial Services
- Exam vendor
- PSI
- Prelicensing education
- 20 hours per line (40 hours combined life & health)
Who regulates life & health insurance licensing in Michigan?
The Michigan Department of Insurance and Financial Services (DIFS) licenses resident producers and contracts with PSI Services as its prelicensing and examination vendor.
Does Michigan require prelicensing education for the life & health exam?
Yes. Michigan requires 20 hours of approved prelicensing education for each individual line of authority (40 hours for a combined life and health license). The prelicensing certificate is valid for 12 months.
What score do I need to pass the Michigan life & health exam?
Michigan passing scores vary by exam and are not the standard 70% used in most states, so confirm the current threshold for your specific exam with DIFS/PSI before testing.
Sources: https://www.michigan.gov/difs, https://www.psiexams.com/
In the Michigan Life & Health Insurance Producer Exam guide: A KEY CONCEPT box, a Common Traps list and a Check Yourself set closing each of the 9 national chapters. Practice here stays free.