Insurance Producer License
What Is an Insurance Producer?
Insurance producers sell insurance products on behalf of insurance companies. A person with an insurance producer license can sell various types of insurance and bind clients to policies. Producers can work exclusively for one insurance company or represent multiple carriers.
Working in the insurance industry requires finding new clients and maintaining relationships with past clients. Insurance producers are a reliable point of contact for clients who need to file claims or increase coverage amounts. They also calculate premiums, monitor and settle claims, determine the insurance risk of properties, and act as an intermediary between clients and insurance companies. In the United States, there are over two million individuals and nearly 250,000 business entities licensed to provide insurance services.
Insurance Producer vs. Insurance Agent vs. Insurance Broker
If you are pursuing a career in the insurance industry, you are likely to come across different job titles that sound similar. Understanding the difference in those career paths will help you choose the one that is best for you.
The two most commonly used job titles are insurance producer and insurance agent. From a duties and responsibilities perspective, in most states, these two career paths are the same. The terms are used interchangeably. “Insurance agent” is used more often, but you will find “insurance producer” is the most common title states use for licensing purposes. In states where the definitions differ, insurance producers engage in selling insurance products while agents investigate claims to determine who should pay for losses.
Insurance brokers are different. While insurance producers and agents represent insurance companies, brokers represent insurance buyers. Brokers look for insurance policies that meet their clients’ needs. They cannot bind clients to policies. Brokers need to work with producers or agents to finalize transactions.
How to Become an Insurance Producer
Obtaining an insurance producer license is a detailed process. In terms of general qualifications across the country, you must have a high school diploma and be at least 18 years of age. If you meet those requirements and are ready to start a career, consider the following steps:
- Determine the type of insurance you want to sell.
- Learn about your state’s licensing requirements.
- Complete required prelicensing education.
- Pass your state’s licensing exam.
- Apply for your license.
You can apply for your license through the National Insurance Producer Registry (NIPR) once you pass your state’s licensing exam. The NIPR is a nonprofit technology company that provides data for insurance professionals. You can check your application status from its website. Note that it typically takes seven to ten business days for states to review transactions and approve applications or ask for additional information.
You can only receive an official hard copy of your license from the regulating state. But, the NIPR can help you obtain a printed copy. You will be redirected to the licensing state website to learn about getting a copy and when or why you might need one.
With the proper drive and tenacity, you will be able to learn about your chosen insurance type and pass your state’s licensing exam. However, your state’s licensing requirements may be harder to understand. Fortunately, the licensing experts from Harbor Compliance can help.
Insurance Producer License Classes
There are several insurance producer license classes. Some of the most common are listed below.
- Accident and Health Agent
- Automobile Insurance Agent
- Bail Agent
- Bail Permittee
- Bail Solicitor
- Cargo Shippers’ Agent
- Casualty Broker-Agent
- Credit Insurance Agent
- Life Agent
- Life and Disability Insurance Analyst
- Life-Only Agent
- Life Settlement Broker
- Life Settlement Provider
- Motor Club
- Fraternal Agent
- Personal Lines Broker-Agent
- Portable Electronics Insurance Agent
- Property and Casualty Broker-Agent
- Property Broker-Agent
- Reinsurance Intermediary
- Rental Car Agent
- Self-Service Storage Agent
- Surplus Line Broker
- Stock Agent
- Travel Insurance Agent
- Vehicle Service Contract Provider
Renewing an Insurance Producer License
The process for renewing an insurance producer license also varies by state. Renewals typically range from one to four years. License holders in many states are also required to pursue continuing education to stay current on trends and overarching changes to the insurance industry.
In terms of maintenance, license holders need to follow state laws continuously. State regulators manage marketplace conduct, investigate complaints filed against producers, focus on consumer protection, and take action against individuals and business entities that violate the law.
Resident License Renewal vs. Non-Resident License Renewal
In terms of renewal, you have two license types to choose from—resident and non-resident. A resident license holder conducts business in the state in which they permanently reside. A non-resident license holder lives in a different state than the one in which they are seeking licensure.
While state laws vary, most insurance producers need to obtain licensure in the state they reside in before seeking a non-resident license. Those that live in one state and plan to work in another may or may not be required to pass multiple licensing examinations.
The renewal process becomes even more complex if you sell insurance in multiple states. For example, say you work as a producer for a large insurance agency. If the company you work for sells insurance in 20 states, you will need to maintain active non-resident licenses in all of those states, as well as a resident license in the state where you live.
Click on a link below to view licensing information in your state.
Meeting the insurance producer license requirements is not always an easy process. Fortunately, the Harbor Compliance License Manager helps insurance professionals maintain their licenses by automating repetitive tasks like tracking renewals. Through License Manager, you can also access reference data for the states in which you work. That will reduce the time you need to spend researching state requirements. Contact our licensing experts today to learn more.
Adjuster - A person or firm that is paid to adjust, investigate, and negotiate claim settlements. There are 3 categories of adjusters: company, independent, and public. Company adjusters work for insurance companies and investigate claims on behalf of the company. Independent adjusters investigate claims on a contractual basis for insurance companies. Public adjusters investigate claims on behalf of claimants, usually to determine the amount of money that can be claimed.
Agent in Charge - A licensed individual responsible for the supervision of all individuals within an insurance agency. The agent in charge must be licensed in the same lines as the agency.
Insurance Agent - Insurance agents act as intermediaries between the insurance company and policyholders. Agents can be either captive or independent. Captive agents represent a single insurance company, while independent agents represent multiple insurers.
Insurance Broker - Individuals who sell insurance policies while representing the interests of the buyer. Brokers are typically independent intermediaries without an insurance company affiliation.
Insurance Producer - May be used to refer to either individual insurance agents and brokers or insurance agencies and brokerages.
Managing General Agent - An agent or broker that is involved in underwriting and has other areas of authority normally handled by insurers. MGAs are typically involved in unusual lines of coverage or in geographically prohibitive areas.
Surplus Lines Insurer - An insurance carrier that takes on risks that a licensed carrier is unwilling to insure. Surplus lines insurers do not have access to state guaranty funds and are less tightly regulated by state governing bodies.
Third Party Administrator - An organization that manages group insurance policies and works with the employer and insurance carrier to process claims, handle loss control, and provide risk management and consulting services.
Title Agent - Title agents sell insurance that protects real estate owners against loss of ownership of a property due to a legal claim.
Viatical Settlement Provider - A company that purchases life insurance policies at a discount from individuals seeking immediately available funds.
Independent Insurance Agents and Brokers of America (Big “I”)
Advocacy group of independent insurance brokers and agents.
National Association of Insurance and Financial Advisors (NAIFA)
Professional association that advocates for favorable regulatory conditions for insurance agents and financial advisors.
National Association of Insurance Companies (NAIC)
A standard setting and regulatory support organization that is governed by state insurance regulators.
National Association of Professional Insurance Agents (PIA)
Professional association that provides education and advocacy for insurance agents throughout the United States.
National Insurance Producer Registry (NIPR)
An affiliate of the NAIC that provides streamlined and uniform producer licensing processes.