Ever wonder why an insurance license is required? There are two basic reasons:
- Consumer protection
- Track producer (agent and broker) activities
Do you know who regulates insurance licensing? Insurance licensing is regulated by the several entities.
- The state insurance department (division, bureau, etc.) has a licensing unit that issues resident insurance licenses and nonresident insurance licenses as well as agency licenses. The department is also charged with the responsibility of enforcing the state laws and procedures regarding insurance licensing in its state. This includes such things as license renewal, continuing education, appointments, terminations, suspensions and revocation of licenses, and much more.
- The National Association of Insurance Commissioners (NAIC) is a made of insurance commissioners and regulators from each state. The NAIC is a resource for state insurance departments in all areas of insurance including insurance licensing. They meet quarterly as well as hold various conference calls, working group meetings, and much more. They draft model laws and work towards uniform and reciprocal insurance licensing.
- The National Insurance Producer Registry (NIPR) is a division of the NAIC. They host and maintain the Producer Database (PDB). They promote and implement electronic insurance licensing. NIPR also handles electronic appointments and terminations as well as address changes. NIPR works very closely with the NAIC.
The information provided on this blog is not legal advice and the reader is advised to consult an attorney regarding application of this information in any particular situation.
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