What action can the Director take regarding a licensee's controlled business premium ratio?

The correct answer addresses the Director's authority to take specific actions in response to a licensee's controlled business premium ratio. The controlled business premium ratio is a measure that ensures that the business an agent or broker is placing does not disproportionately benefit the licensee’s own interests, potentially leading to conflicts of interest or unethical practices.

Refusing to issue a license renewal is a pertinent course of action because it serves as a mechanism to uphold regulatory standards. If a licensee does not maintain an acceptable controlled business premium ratio, it can indicate potential violations of regulations aimed at ensuring ethical practices within the insurance industry. In such cases, the Director has the authority to deny renewal until the licensee rectifies the underlying issues.

Other options such as revoking the license immediately, requiring additional training, or conducting an audit, while possibly relevant in certain contexts, may not be the most appropriate or immediate action in this scenario. The action of refusing to renew a license directly focuses on the regulatory compliance aspect, allowing the Director to address any discrepancies in the licensee’s practices before granting continued permission to operate in the industry.