Have you or any associated professional ever had a professional license or registration denied, suspended, revoked, non-renewed, or restricted?

This question helps the insurance carrier evaluate your firm's risk profile by identifying past regulatory or professional conduct issues. Adverse actions against a professional license—such as a suspension or revocation—are significant disclosure events that indicate a history of compliance problems, ethical breaches, or professional misconduct. This history can signal a higher likelihood of future Errors and Omissions (E&O) claims.

• What is a "Professional License or Registration"? This refers to any credential or authorization required to practice in a professional capacity. For this application, it primarily includes investment advisor registrations (with the SEC or states), CPA licenses, and securities licenses (e.g., Series 7, 65, 66).
• What do "Denied, Suspended, Revoked, etc." mean? These are all forms of adverse action from a regulatory body:
  • Denied: Your application for a license was rejected.
  • Suspended: You temporarily lost the right to practice.
  • Revoked: Your license was permanently taken away.
  • Non-renewed: A regulator refused to renew your license, often due to compliance issues.
  • Restricted: Limitations were placed on the scope of your practice.

To answer this question, you must disclose if you or anyone at your firm has ever had any adverse action taken against a professional license.

• Review History: This applies to the entire professional history of each person, not just the last few years.
• Broad Scope: The question covers you and all associated professionals, including partners, officers, and employees.
• All Actions: You must report any instance of a license being denied, suspended, revoked, non-renewed, or restricted, even if the issue has since been resolved.

If any such event has occurred for anyone at your firm, you must answer "yes." If not, you can answer "no."

• Mistake: Thinking a past or resolved issue doesn't need to be disclosed.
  • You must disclose any licensing issue, no matter how long ago it occurred or if your license was later reinstated. These events are part of your permanent regulatory record.
• Pitfall: Believing a non-renewal for failing to complete continuing education is not relevant.
  • It is. A non-renewal for any reason other than your own choice not to renew is an adverse action and must be disclosed. It demonstrates a compliance lapse.
• Mistake: Forgetting to ask all employees about their history.
  • The duty to answer accurately falls on the firm. You should have a process, such as an annual compliance questionnaire, to ask all associated professionals about any disclosure events in their past.