Key Takeaways
- Major lines of authority include life, health, property, and casualty.
- Limited lines cover specific products like credit, travel, or crop insurance.
- Surplus lines require separate licensing and place coverage with nonadmitted insurers.
- Temporary licenses may be issued in limited circumstances.
- Nonresident licenses allow producers to sell in other states with reciprocity.
- Appointments authorize a producer to represent a specific insurer.
Types of Licenses
Insurance licenses are issued for specific lines of authority—the types of insurance a producer is authorized to sell.
Major Lines of Authority
Life Insurance License
| Aspect | Details |
|---|---|
| Products Covered | Term life, whole life, universal life, variable life* |
| Related Products | Annuities (fixed), credit life |
| Exam | Life insurance examination |
| Special Note | *Variable products require securities license |
Health (Accident and Health) License
| Aspect | Details |
|---|---|
| Products Covered | Medical, disability, long-term care |
| Related Products | Medicare supplements, dental, vision |
| Exam | Health/Accident & Health examination |
| Alternative Names | Accident & Sickness, Accident & Health |
Combined Life and Health License
Many states offer a combined Life, Accident, and Health license that authorizes the sale of both life and health products with a single license.
| Feature | Details |
|---|---|
| Scope | All life and health products |
| Exam | Combined examination |
| Advantage | Broader product authority |
| Pre-Licensing | May require more hours |
Specialty Licenses
Variable Products License
Selling variable insurance products requires additional licensing:
| Requirement | Details |
|---|---|
| Insurance License | Life insurance license required |
| Securities License | FINRA registration (Series 6 or Series 7) |
| Investment Adviser | May also need Series 63/65/66 |
| Products | Variable life, variable annuities |
Exam Tip: Variable products involve investment risk and are considered securities. A producer must hold BOTH an insurance license AND a securities license to sell them.
Long-Term Care Partnership Program
Some states require special certification for producers selling Partnership LTC policies:
| Requirement | Details |
|---|---|
| Initial Training | 8 hours of LTC training |
| Ongoing Training | 4 hours per renewal cycle |
| Topics | LTC products, regulations, suitability |
Key Takeaways
- Major lines of authority include life, health, property, and casualty.
- Limited lines cover specific products like credit, travel, or crop insurance.
- Surplus lines require separate licensing and place coverage with nonadmitted insurers.
- Temporary licenses may be issued in limited circumstances.
- Nonresident licenses allow producers to sell in other states with reciprocity.
- Appointments authorize a producer to represent a specific insurer.
Other License Types
Limited Lines Licenses
| License Type | Products Covered |
|---|---|
| Credit Insurance | Credit life, credit disability |
| Travel Insurance | Trip cancellation, travel medical |
| Rental Car Insurance | Collision damage waiver |
| Pet Insurance | Animal health coverage |
| Title Insurance | Real estate title protection |
Surplus Lines License
| Feature | Details |
|---|---|
| Purpose | Place coverage with non-admitted insurers |
| When Used | Standard market cannot provide coverage |
| Requirements | Separate license, additional training |
| Regulations | Different rules than admitted insurers |
Producer vs. Other Roles
| Role | Definition | License Required? |
|---|---|---|
| Producer | Sells, solicits, or negotiates insurance | Yes |
| Consultant | Advises for fee (doesn't sell) | Varies by state |
| Adjuster | Investigates and settles claims | Separate adjuster license |
| Customer Service Rep | Administrative support only | Generally no |
Agent vs. Broker
| Aspect | Agent | Broker |
|---|---|---|
| Represents | Insurance company | Consumer/client |
| Appointment | Appointed by insurers | May work with multiple insurers |
| Authority | Acts on behalf of insurer | Acts on behalf of client |
| Duty | Owes duty to insurer | Owes fiduciary duty to client |
Key Point: The distinction between agent and broker affects who the producer represents and their legal duties. Brokers typically owe a higher fiduciary duty to clients.
Key Takeaways
- Major lines of authority include life, health, property, and casualty.
- Limited lines cover specific products like credit, travel, or crop insurance.
- Surplus lines require separate licensing and place coverage with nonadmitted insurers.
- Temporary licenses may be issued in limited circumstances.
- Nonresident licenses allow producers to sell in other states with reciprocity.
- Appointments authorize a producer to represent a specific insurer.
To sell variable life insurance, a producer must have:
Which of the following would require a surplus lines license?
What is the primary difference between an insurance agent and an insurance broker?