Why do you need an insurance license?

To review health, life, and/or property and casualty insurance plans in detail and handle enrollments you must hold an insurance license – it is state law.

How do you get an insurance license?

To get an insurance license many states require that you take an approved education course. After passing the course, a background check is completed and you must pass a state exam. An application and fee is submitted to the state for review and approval. If approved, the state issues you a resident state license.

What states do the resident license work in?

The resident licenses can only be used in the state you tested in and hold residency with. Good news though, there’s just a couple of additional steps to get licensed in other states. To handle insurance policies in other states you must submit an application and a fee to the respective state. Ready for even better news? You are not required to sit for testing again because your resident license is your ticket to getting the other state licenses. These licenses are called non-resident or reciprocal licenses.

How long does it take for the state to review applications?

Clean background? Some states approve applications in 1 day and others take upwards of 3 weeks for those with a clean background.

Background?

If the state finds something on your background it can take 30 days or more to approve.

How does having a background affect the licensure process?

Insurance is a financial product so the states do FBI level background checks of your adult life criminal record (and occasionally juvenile records) to check your moral turpitude. If you have a misdemeanor or felony, they will require certified court documentation showing the case is fully closed. A closed case means you have completed any sentence, probation, paid fees and you are in good standing. Court documentation is also needed for cases where adjudication is withheld, sealed, and/or expunged – the states have access to your entire record. Things such as past due child support and taxes are also considered as a part of the application. Having any of these items does not mean you cannot get licensed, however it is ultimately up to the state to decide if they want to approve you. This goes for both resident and non-resident licenses.

How do I renew my license?

Most states expire after about 2 years. To renew your resident license, you must complete Continuing Education courses approved by the state then submit a renewal application with the fee. For non-resident states, you just submit the application and fee. If your resident license expires, all non-resident licenses and appointments will be cancelled.

What else do you need to sell health, life, and/or property and casualty insurance policies?

You’re on the right track. Getting licensed is the 1st step in having what is needed to sell insurance policies. You also need to complete certifications and obtain an appointment from the insurance carrier.

How do you get an appointment?

Most insurance carriers require that you take certifications to understand the policies they have for the current year. Along with completed certifications, another application and fee is submitted from the carrier to the state requesting the agent appointment. The appointment is the carrier’s authorization to sell their products. Some states won’t process the appointment until the agent makes their 1st sale in that state – these are called Just in Time states (JIT). For all other states an appointment is needed 1st to be considered Ready to Sell (RTS).

What is Ready to Sell?

Carriers consider an agent ready to sell in a state once they are licensed, completed certifications, and appointed. You’ll need to complete these three things otherwise an agent cannot sell in the state (apart from the just in time appointments). These separate steps must be tracked closely to address any follow up requests and ensure timely processing. Some carriers respond within a week while others can take 3 weeks or more. Being RTS for each state and carrier means more sales opportunity for an agent and a better consumer experience.

What is a broker?

A broker usually can represent multiple carriers at once. Agents on these programs have many more certifications and appointments to obtain to become fully RTS than the single carrier agents.

How can you check the status of a license?

All states have a department of insurance website that allows you to check license and appointment statuses. Another helpful website is NIPR.com which is the National Insurance Producer Registry. This is where you can update all states with your current demographic information, submit renewals, find out state specific contact information, and get more resourceful information.

Are there any administrative actions that can be taken bythe state?

It’s important to keep the state updated on a change in criminal status, demographic change, or conducting fraudulent activities. By not keeping the state updated, it can lead to penalty fees, suspensions, and even revocation of licenses. Once one state takes actions the others usually follow suit.

How do we check to see if any disciplinary action has been taken by a state?

NIPR provides the option to run a Producer Database Report (PDB) on each licensee. This is like a license report card to show any major actions taken by the state.