Vermont Life & Health Insurance Exam — Study Guide

The state portion of your exam

Everything before this chapter is national content. This chapter is the other half: the Vermont law tested on the state supplement.

Vermont's insurance code is Title 8 of the Vermont Statutes Annotated (8 V.S.A.). Three chapters carry most of the exam: Chapter 131 (Licensing, §§ 4791-4826), Chapter 129 (Insurance Trade Practices, §§ 4721-4728), and Chapter 112 (Life and Health Insurance Guaranty Association, §§ 4171-4190). Above them sit Insurance Division regulations: I-2001-03 (replacement), I-2023-01 (annuity best interest), I-79-2 (fair claims practices), 77-2 (life solicitation), 99-1 (record retention), and IH-2001-01 (privacy).

A note on numbers. Where a figure below carries a dated citation — for example (8 V.S.A. § 4804(d); checked 2026-09-05) — that figure was read from the cited source on that date. Where a figure still carries a bracketed verify-current flag, it was not confirmed from a primary source and must be checked with the Vermont Department of Financial Regulation before you rely on it. Rules that do not move — whether Vermont has a guaranty association, a replacement regulation, an unfair trade practices act, an annuity best-interest rule — are stated flatly, because the exam expects you to know those affirmatively.

1. The Department of Financial Regulation and the Commissioner

Vermont has no stand-alone insurance department. Insurance is regulated by the Vermont Department of Financial Regulation (DFR) in Montpelier — one agency with four divisions: Insurance, Banking, Securities, and Captive Insurance. (Vermont is the leading U.S. captive domicile.) DFR is headed by the Commissioner of Financial Regulation, appointed by the Governor, not elected. Day-to-day work runs through the Insurance Division under a Deputy Commissioner, but the statutory powers are the Commissioner's; when Title 8 says "the Commissioner," it means the Commissioner of Financial Regulation (§ 4722(2)).

Powers. Sections 10, 11, and 15 authorize the Commissioner to administer and enforce the insurance laws, adopt rules, hold hearings, issue orders, and license insurers and producers; § 4812 authorizes rules for the licensing chapter. Section 4726(a) empowers the Commissioner to examine and investigate any person in the business of insurance to determine whether that person has engaged in an unfair method of competition or an unfair or deceptive act.

Examinations. Insurers are examined under §§ 3563 and 3564. Insurer records are governed by Regulation 99-1, which requires records to be preserved, retrievable by insured name and policy number, and — for Vermont-domiciled insurers — produced in the State on request; note that the regulation's own definition of "insurer" excludes persons required to be licensed under chapter 131, so Regulation 99-1 does not itself bind producers (Vt. Ins. Reg. 99-1 §§ 3(D), 6; checked 2026-09-05). Section 4803(c) imposes a parallel record duty on adjusters and appraisers. Concealing, destroying, altering, or falsifying documents once you know of a relevant complaint or examination is an independent violation (§ 4724(5)(C)) — you need not be guilty of the underlying conduct to be disciplined for obstruction.

Hearings and penalties. Producer discipline requires notice and opportunity for hearing (§ 4804); hearings are contested cases under 3 V.S.A. chapter 25, the Vermont Administrative Procedure Act (§ 4805). On denial or nonrenewal the Commissioner must state written reasons, and on written demand a hearing is held within 30 days of the demand (§ 4804(c)). Two penalty tracks: § 4804(d) for licensing violations — an administrative penalty of not less than $500.00 nor more than $2,500.00, imposed after hearing and in addition to or in lieu of denial, suspension, or revocation — and § 4726(b) for trade-practice violations, not more than $1,000.00 for each violation and not more than $10,000.00 each for violations the Commissioner finds were willful, plus suspension or revocation (8 V.S.A. §§ 4804(d), 4726(b); checked 2026-09-05). The Commissioner notifies appointing insurers, the licensee, and the NAIC of any suspension, revocation, or termination (§ 4806).

2. Producer licensing

Chapter 131 has two live layers: Subchapter 1 (§§ 4791-4812), the older Vermont framework, and Subchapter 1A (§§ 4813-4813o), Vermont's adoption of the NAIC Producer Licensing Model Act. Exam questions come from both.

What requires a license. A producer is a person required to be licensed to sell, solicit, or negotiate insurance (§ 4791(6)), and no one may do so without a license for that line of authority (§ 4813b). Under § 4813a: sell = exchange a contract for money on an insurer's behalf; solicit = urging a person to apply for a particular kind of insurance from a particular insurer; negotiate = advising a purchaser on a particular contract's substantive benefits, terms, or conditions. Section 4813d exempts executive, administrative, managerial, and clerical staff whose work is only indirectly related to sales — provided they take no commission — plus underwriting, loss-control, and claims staff.

Two traps: an unlicensed seller is deemed a producer and the insurer's agent anyway, liable for every producer duty and penalty (§ 4813c(a)-(b)); and a producer acting as an insurer's agent represents the insurer, not the insured, in any controversy between them (§ 4813c(c)).

Resident requirements — § 4813f(a). Apply on the NAIC Uniform Application under penalty of refusal, suspension, or revocation. The Commissioner must find the applicant is at least 18; has committed no act that is a ground under § 4804; is competent, trustworthy, financially responsible, and of good personal and business reputation; has paid the § 4800 fees; and has passed the examination for each line. Two Vermont specifics: the fee schedule sits in the statute itself at § 4800(2)(A) — every application carries a $30.00 fee plus, for an insurance producer, a $30.00 initial and biennial renewal licensing fee and an $80.00 appointment fee per qualification (one fee may be charged for a combined "life and accident and health or sickness" qualification) — and a license or appointment terminates on failure to pay (§ 4800(2)(B)) (8 V.S.A. § 4800(2), as amended eff. Jan. 1, 2025; the same $30.00 + $30.00 resident figures appear on DFR's producer-license page; checked 2026-09-05); and Vermont imposes no statutory prelicensing-education hours requirement — the five findings § 4813f(a) requires before a resident producer license issues are age 18, no ground under § 4804, competence and good repute, payment of the § 4800 fees, and passing the examination, and education hours are not among them (8 V.S.A. §§ 4813f(a), 4800(3)(D)(i); checked 2026-09-05). The application must be filed within 24 months of the exam date (§ 4800(3)(D)(i)).

Lines of authority — § 4813g(a): Life; Accident and health or sickness; Property; Casualty; Variable life and variable annuity products; Personal lines. A Life & Health producer normally holds Life plus Accident and health or sickness. Variable products also require FINRA registration, and Reg. I-2023-01 § 1(D) warns that recommending a security is investment advice requiring registration with the Vermont Securities Division.

The exam is administered for DFR by Prometric, in four-option multiple choice, at a Prometric test center or by ProProctor remote proctoring, with national and Vermont content reflected in one final score. The Life exam (Series 14-25) and the Accident, Health and HMO exam (Series 14-27) each run 100 scored questions plus 5 unscored items on a 2-hour limit; the combined Life, Accident, Health and HMO exam (Series 14-29) runs 150 scored questions plus 5 unscored items on a 2.5-hour limit. A resident may then apply electronically through NIPR 48 hours after passing (Prometric, Vermont Licensing Information Bulletin effective March 18, 2026, and the Series 14-25 / 14-27 / 14-29 content outlines; DFR producer-license page; checked 2026-09-05). [Verify the passing score, the current examination registration fee, and any retake limit with DFR: the current bulletin states no passing score, and its two registration-fee tables give different amounts for the same exams.]

Entities and housekeeping. An agency may be licensed, but individuals still need individual licenses and the entity must designate a licensed natural person responsible for compliance (§ 4813f(b)). Notify the Commissioner before using an assumed name (§ 4813j), and report address changes — including an interstate move, with home-state certification — within 30 days (§§ 4800(3)(F), 4813h(c)).

Appointments — § 4813l. Vermont is an appointment state. A license is the right to transact; an appointment is authority to represent a particular insurer. A producer may not act as an insurer's agent unless appointed; one not acting as an agent need not be. The insurer makes a separate appointment for each line, files the notice within 15 days from the date the agency contract is executed or the first application is submitted, whichever is sooner, and pays the appointment fees. Appointments expire at 12:01 a.m. on the first day of June annually (§ 4798(d)) — do not confuse the June appointment cycle with the April license cycle.

Termination — § 4813m. The insurer notifies the Commissioner within 30 days of the effective date, for cause or without cause; mails a copy to the producer within 15 days (certified or overnight if for cause); and the producer may file comments within 30 days, which travel with any report about the producer. Absent actual malice, insurers, producers, and the Commissioner have immunity for these reports.

Term and renewal — § 4798. Vermont licenses are not birthday-based. Producer licenses expire at 12:01 a.m. on April 1 of the odd-numbered year following issuance — a fixed statewide two-year cycle. Other license types under the subchapter expire April 1 of the even year.

Continuing education — § 4800a. 24 hours of CE in the preceding two years for renewal — a total that does not double for multiple lines (a). Commissioner rules cover an advisory council of professionals and consumers, course and provider approval, standards, and documentation (b). For good cause, the period may be extended up to six months (c). A nonresident who satisfies and documents home-state CE is exempt (d), as reciprocity confirms (§ 4813n(b)). Fail CE with no extension and the license shall not be renewed (e); fail after an extension and it shall be suspended (f). The Commissioner may contract with an outside vendor to administer CE, with costs borne by producers and providers (g) — Vermont's vendor is Prometric, and it is the course provider, not the producer, that reports completions (8 V.S.A. § 4800a(g); DFR continuing-education page; checked 2026-09-05). Within the 24, Regulation I-2000-02 (Revised) requires at least 3 hours of ethics for every producer and a one-time 3-hour National Flood Insurance Program course for every producer licensed to sell property and casualty insurance, whether or not that producer sells flood — both counted inside the 24, not on top of them — and no more than six of the 24 may be agency-management courses. The review period is the 24 months beginning April 1 of an odd-numbered year and ending March 31 two years later, so it closes on March 31 of an odd-numbered year, matching the April 1 license cycle (Vt. Ins. Reg. I-2000-02 (Revised) §§ 3(I), 4(A), 7(B)(3)-(5); checked 2026-09-05). [Verify any CE vendor fees with DFR — neither § 4800a nor Regulation I-2000-02 publishes an amount.] Annuity training is separate and additional (section 7).

Temporary license — § 4813k. The Commissioner may issue a temporary license for up to 180 days without examination where needed to service an existing business: to the surviving spouse or court-appointed personal representative of a producer who dies or becomes disabled; to a member or employee of a licensed entity on the death or disability of its designated individual; to the designee of a producer entering active military service; or where the public interest is served. The Commissioner may limit authority by order, require a sponsor responsible for the temporary licensee's acts, and revoke if insureds or the public are endangered; it may not continue after the business is disposed of. A continuity device, never a shortcut into the business.

Nonresidents — §§ 4813h, 4813n. Vermont licenses reciprocally: home-state license in good standing, Vermont fees paid, home-state or Uniform Application submitted, and the home state licensing Vermont residents on the same basis. Home-state CE satisfies Vermont CE. Under § 4813i, an applicant previously licensed for the same lines elsewhere needs no prelicensing education and no Vermont exam if currently licensed there or applying within 90 days of cancellation; a producer who moves to Vermont must apply within 90 days of establishing residence.

Grounds for discipline — § 4804(a). Fifteen grounds: materially untrue application information; any cause that would have supported refusal at issuance; violating any insurance law, rule, subpoena, or order of the Commissioner or of another state's commissioner; obtaining a license by fraud; improperly withholding, misappropriating, or converting money belonging to policyholders, insurers, or beneficiaries; misrepresenting contract terms; conviction of a felony or a misdemeanor involving moral turpitude; committing any unfair trade practice or fraud defined in Title 8, expressly including Vermont's health and Medicare marketing rules; fraudulent, coercive, or dishonest practices, incompetence, untrustworthiness, or financial irresponsibility; suspension or revocation in another jurisdiction; forging another's name; cheating on a licensing exam; knowingly accepting business from an unlicensed person; violating a child-support order; and failing to pay Vermont income tax. Section 4804(b) extends discipline to a business entity whose partner, officer, director, or manager knew or should have known of a violation and neither reported nor corrected it.

Reporting actions — § 4813o. Two 30-day clocks: any administrative action in another jurisdiction or by another Vermont agency, within 30 days of final disposition; any criminal prosecution, within 30 days of the initial pretrial hearing date.

Controlled business — § 4795. The Commissioner shall not grant, renew, or continue a license — except for life insurance — used to write controlled business (coverage on the licensee, immediate family, the licensee's employer, or entities where the licensee or a family member is an officer, director, substantial stockholder, partner, or employee). Trigger: controlled-business commissions exceeding 25 percent of aggregate commissions in any 12-month period.

Commissions — § 4796. No one may pay or accept a commission, service fee, brokerage, or other valuable consideration for selling, soliciting, or negotiating in Vermont if the person must be licensed and is not. Renewal and deferred commissions may be paid to a person licensed at the time of sale. Commissions may go to an agency or to non-selling persons unless the payment would be a rebate under § 4724(8). Distinctly Vermont, § 4796(e) bars accepting compensation for connecting a Vermont resident to a health-care-cost-sharing arrangement that is not insurance.

Consultants — § 4802. Vermont separately licenses insurance consultants, who charge a fee, need a written agreement signed by both parties before rendering services, must retain it at least two years, and must file and keep in force a corporate surety bond in a penal sum of not less than $5,000.00, terminable only on 60 days' written notice to the licensee and the Commissioner (8 V.S.A. § 4802(c), (i); checked 2026-09-05). No person may concurrently hold a consultant's license and a producer's, surplus lines broker's, or limited lines producer's license, and a consultant may take no remuneration from any producer or insurer for consulting work. The consultant owes the client objectivity and complete loyalty.