Under federal law, an insurance producer may be sentenced to prison for:

Criminal vs. administrative violations.

Not all insurance violations are crimes.

Criminal penalties apply when conduct involves fraud, theft, or embezzlement.

Define embezzlement.

Embezzlement involves misappropriating funds entrusted to the producer, such as:

Premium payments

Trust account funds

Evaluate each option.

A. Selling with a nonresident license

Typically an administrative violation, not a felony.

B. Embezzling money

Correct. This is a federal and state crime punishable by imprisonment.

C. Inducing a client to sign an application

Lawful solicitation activity.

D. Suing an insurer

A legal right, not a crime.

Maryland enforcement context.

Embezzlement may result in:

License revocation

Criminal prosecution

Restitution orders

Conclusion.

Embezzlement can result in prison sentencing.