How Is an Insurance Agent Granted Permission to Sell Insurance Again
There are many questions regarding the terminology surrounding insurance licensing. Hither is a glossary of insurance licensing terms for your convenience and clarification.
1033 consent waivers – Allows a banned person from working in the insurance business organization to apply to the state insurance commissioners for written consent to participate in the insurance business.
Active Member – A fellow member of an bureau who holds a valid license and appointment, and is actively involved in the daily activities of the bureau.
Adjuster – A person, unremarkably a salaried employee, who settles or adjusts claims.
Admitted or Authorized Company – An insurance company authorized or admitted to practice business in a given land.
Bureau – A firm, corporation, or one or more individuals interim in association with each other every bit a single entity. An agency may exist a corporation, partnership or sole proprietorship. Also known as business concern entity.
Agent – An individual licensed and appointed by an insurance company to sell, solicit or negotiate insurance.
Amanuensis, Convict – An agent of a specific insurance company with the responsibility for selling insurance. Represents merely one company. Also referred to as sectional.
Agent, Independent – An agent in business organization for himself or herself, selling insurance for many dissimilar companies. Also referred to as nonexclusive.
Conflicting Bureau or Company – An bureau or company organized and domiciled in a country other than the United States.
Appointment – An agreement between an insurer and a licensee authorizing the licensee to correspond the insurer in the sale of its insurance products.
Appointment Renewal – Continuation of a producer's existing appointment based on payment of the required fee.
Manufactures of Incorporation – A legal certificate explaining how a corporation is set up, how its officers are elected and guidelines for functioning.
Assignment of Commission – Some states allow commission payments to be assigned (fabricated payable) to another party.
Authorized Company Representative – An authorized individual who volition license, appoint or terminate licensees on behalf of an insurance company.
Background Investigation – An investigation of an applicant required in some states prior to issuing a license or appointment. Investigations may include criminal history, employment history and credit checks.
Bond Bail Agents – A bond bond is considered a iii-part contract betwixt the defendant, the government and the insurance company used to obtain the custody release of a accused pending trial.
Broker – A term generally used to describe one who places business with more than one company, and who has no exclusive contract requiring that all business organization exist offered to a single company. Different an agent, who is considered to represent a company, the broker usually is considered to correspond the client.
Banker/Dealer – A firm that acts every bit an intermediary between buyers and sellers of securities for both the general public and other broker/dealer firms.
Business Entity – A corporation, association, partnership, express liability company, limited liability partnership, or other legal entity.
Cancellation – Termination of an insurance license or appointment before the end of the license or appointment period.
Carrier – An insurance company. See also Insurer.
Certificate of Completion – A certificate issued by a provider to a student upon the successful completion of either prelicense teaching or continuing educational activity courses. Also referred to as certificate of compliance.
Committee – The portion of the premium stipulated in the contract to be retained by the licensee as compensation for sales, service, and distribution of insurance policies.
Company Adjuster – An employee of an insurer who adjusts claims on behalf of that insurer for a salary.
Consultant – A licensee paid to examine policy benefits, advising or counseling clients about their benefits and advantages or disadvantages of diverse insurance policies.
Continuing Education – Education required in some states to renew the license, unless exempt.
Standing Education Reciprocity (CER) – Simplified filing method for approval continuing education courses by other states.
Countersignature – Signature of a resident licensee or representative of the insurer on an application for an insurance policy sold past a nonresident licensee necessary to complete the application.
Contract – A signed agreement between an insurer and a licensee outlining what each party is expected to practise. Generally the contract specifies the percent of committee the insurer will pay and the amount of insurance the licensee is expected to sell.
Corporation – I or more individuals operating under the articles of incorporation as a unmarried business. Corporations typically take officers and a lath of directors.
Credit Written report – A report obtained from a professional reporting company on the financial status of a licensee or bidder. A type of groundwork investigation.
DBA – Doing business as, usually referring to a person or firm doing business nether another house proper name.
Designated Responsible Licensed Producer – An private in an bureau who is responsible for the conduct of all the agency's licensed members and all transactions of the agency.
Domestic Bureau or Company – An bureau or visitor formed nether the laws of the state in which the insurance is written.
Errors & Omissions (E&O) Liability – The liability a producer assumes, past the fact of doing business, for errors or omissions he or she may commit in recommending, providing, standing, or failing to provide or keep the insurance coverage clients require. Producers can protect themselves by purchasing E&O Liability coverage.
Fingerprints – A process of checking an applicant's fingerprints for possible criminal history every bit required in some states prior to issuing a license.
Fiscal Institutions – A national bank, state bank or savings association. Credit Unions are generally not considered to be financial institutions.
Fiscal Responsibility – Some states require licensees have a surety bond, errors and omissions liability coverage or some other insurance department-approved financial organisation in case a customer files a legal complaint against the licensee.
Offset-Time Applicant – An bidder for an insurance license that has never held a resident license before in the state and must meet that land's license requirements. A resident private in this category must laissez passer the license examination. Beginning-time applicants have not notwithstanding been appointed.
Foreign Agency or Visitor – An agency or company organized under the laws of a state other than the one where insurance is written.
Full general Amanuensis (GA) – A person, firm or corporation having potency to supervise, hire and terminate producers for 1 or more insurers. Full general agents are paid a commission or fee.
Some general agents are given potency to perform other administrative functions normally handled by an insurer such as claim payments, premium billing, verifying coverage and and so on. General agents are as well authorized to sell, solicit or negotiate insurance.
Gramm-Leach-Bliley Act (GLB) – A federal police force adopted in 1999 that required states to develop either a reciprocal or uniform approach to nonresident insurance producer licensing by November 12, 2002.
Dwelling house Office – The place where an insurance company maintains its chief executives and full general supervisory departments.
Home State – The District of Columbia and whatsoever state or territory of the United states in which an insurance producer maintains his or her principal place of residence or main place of business concern and is licensed to deed as an insurance producer.
Contained Adjuster – One who adjusts losses on behalf of companies but is not on their payroll. The independent adjuster is paid by a fee for each loss adjusted, as distinguished from a visitor adjuster who is paid a regular salary by ane company.
Insurance Commissioner – Common championship for the head of a state department of insurance. In some states, known as the managing director or superintendent.
Insurance Department – A governmental bureau in each state or territory (and federal government in Canada) charged with assistants of the insurance laws, including licensing, exam, and regulation of producers and insurers. In some jurisdictions, the department is a division of some other state department or bureau.
Insurance Producer – A person required to be licensed under the laws of this state to sell, solicit or negotiate insurance.
Insured – The party who purchases insurance from an insurer who agrees to provide benefits or services.
Insurer – The political party that undertakes the losses or provides benefits or services. Also chosen the insurance company and sometimes insurance carrier.
Letter of Clearance – Usually estimator-generated letter stating an individual held a resident license in his or her sometime abode land just has now canceled the license. Letter of the alphabet likewise states license type and line(s) of insurance for which the individual was licensed. Insurance departments generally crave original alphabetic character. Letter of the alphabet required for resident applicants who have relocated from i state to another state.
Letter of Good Standing – A letter by and large issued by the Secretary of Country's office showing an bureau is in good continuing in the resident state. The letter of the alphabet may also be referred to as certificate of good continuing or certificate of existence.
License – An agreement betwixt a licensee and a state insurance department authorizing the licensee to sell insurance nether the guidelines established by the insurance laws of that land.
Licensee – An individual or business concern entity that holds a valid license and is appointed past an insurer to solicit, negotiate or procure insurance.
License Application – An application course that must exist completed in order to obtain a new license, an additional license, or a license reinstatement.
License Examination – A requirement for all resident applicants who wish to qualify for an insurance license, unless exempt.
Express Liability Company (LLC) – A type of organization that has characteristics common to both corporations and partnerships. Arrangement must take ii or more than members having equal condition and where no member is personally liable for the debts of, or claims against the organization.
Limited Lines Producer – A person authorized past the insurance commissioner to sell, solicit or negotiate limited lines insurance.
Limited Lines License – Usually refers to a license that limits the licensee to selling a particular line of insurance. In some states, this license blazon has more lenient qualifications than a standard lines license.
Managing Full general Amanuensis (MGA) – A person, firm, association or corporation having authorisation to supervise, hire and cease producers for an insurer. MGAs are paid a commission or a fee. MGAs have more administrative authority than full general agents and sell, solicit or negotiate insurance either directly or indirectly. They may also negotiate reinsurance for insurance companies.
Market Regulation Handbook – A handbook adult by the NAIC Market Regulation Handbook Working Group that contains guidelines for market regulation examinations and investigations including different options for investigation techniques, called the continuum of regulatory responses.
Mutual Visitor – An insurance company owned by the policyholders.
Name Approval – Official proper noun, causeless name, or trade name of an agency on file and canonical by the insurance department as required in some states.
NAIC (National Association of Insurance Commissioners) – An association of country insurance commissioners in the 50 states, District of Columbia and four U.Southward. territories that is organized for the purpose of exchanging information and working toward uniformity of insurance regulation.
National Alluvion Insurance Program (NFIP) – The NFIP is federal program administered by FEMA enabling property owners in participating communities to purchase insurance as protection against overflowing losses. Individuals selling flood insurance must be licensed equally an insurance producer.
National Producer Number (NPN) – The NPN is a unique identification assigned past the NIPR that identifies each entity in the State Producer Licensing Database.
Negotiate – The act of conferring straight with or offer advice directly to a purchaser or prospective purchaser of a particular contract of insurance apropos any of the substantive benefits, terms or weather condition of the contract, provided that the person engaged in that act either sells insurance or obtains insurance from insurers for purchasers.
National Insurance Producer Registry (NIPR) – NIPR is a nonprofit affiliate of the NAIC. The purpose of NIPR is to work with the states and the NAIC to reengineer, streamline and brand more uniform the producer licensing process for the benefit of regulators, the insurance industry and consumers.
Nonresident License – A license issued to an individual who is not a resident of that land.
Notarized – A notary public must witness the signing of a grade or certificate.
Override Commission – A commission paid to an agency or individual for a percent of business produced by its licensees.
Partnership – Several individuals acting under a partnership agreement as a single business organisation. Generally two or more individuals ain and operate the business jointly.
Partnership Understanding – A legal document specifying a business is jointly endemic and specifying the legal and business arrangements of the partners.
Person – An individual or a business organization entity.
Prelicense Education – Education or preparation required in some states prior to taking a license examination to qualify for a resident license.
Power of Attorney/Service of Process – The written document that allows the insurance commissioner to receive legal complaints filed confronting a nonresident licensee.
Producer Database (PDB) – An electronic database of insurance producers containing license and appointment information. Every country participates in the PDB and reports information to this central repository.
Producer Licensing Model Act (PLMA) – A model act adopted by the NAIC to update and standardize many aspects of state producer licensing.
Producer Licensing Working Group (PLWG) – NAIC working group charged with creating and monitoring uniform licensing standards and providing guidance to state insurance licensing departments.
Public Adjuster – A type of adjuster hired, usually under a contract, by insureds and are charged with protecting their insured-client's interests.
Qualified Licensee – An individual or agency who already holds a license and has met the license requirements in a specific country. A qualified licensee is already appointed to represent a company and wants to exist appointed by new or additional insurers.
Reciprocal Agreement – A mutual agreement between 2 states whereby producers of each land can sell insurance in the other country.
Reinstating A License – A lapsed license may be reactivated in some states without repeating the prelicense educational activity and license test requirements, as long as it is done within a divers time flow. Also applies to agencies.
Reinsurance – Understanding between insurance companies under which one accepts all or role of the run a risk for the other.
Reinsurance Intermediaries – A reinsurance intermediary acts equally a broker in soliciting, negotiating or procuring the writing of any reinsurance contract or folder. Reinsurance Intermediaries act as insurance producers in accepting any reinsurance contract or binder on behalf of an insurer.
Reinsurers – Insurers that take all or part of the risk of another insurer.
Rejection – The refusal of an awarding or fee for license or engagement past the insurance department.
Renewal – Continuation of the license or date beyond the original date of expiration. Renewals vary from annually to every 4 years.
Resident License – A license issued to an individual who lives in the state where the license is issued.
Retaliatory – Usually pertains to licensing fees. Retaliatory fee is the college of the home state fee or the nonresident land fee.
Revocation – A license that is terminated because the licensee has violated insurance laws or for unethical behavior.
Regulatory Information Retrieval Organisation (RIRS) – A database maintained by the NAIC which includes information filed by states to study formal administration deportment.
Gamble Purchasing Groups – Operates under federal constabulary. RPGS are only allowed to place liability coverage. RPGs are purchasing entities, not insurers, formed to pool purchasing power on like risks and are not generally subject to state insurance laws.
Risk Retentiveness Groups – Formed as a result of the Risk Retention Act of 1981, a federal law that enables licensed insurers to course risk memory groups in order to provide group self-insurance. RRGs are fully regulated in one state pursuant to that state'due south laws. RRGs are limited to providing non-workers' compensation.
Sell – To substitution a contract of insurance by whatsoever means, for money or its equivalent, on behalf of an insurance company.
Service Representative License – License issued to an individual employed by and paid a bacon by an insurer, managing general agent or general agent. Service Representatives work in the field with licensees to help them in negotiating, procuring or soliciting insurance.
Sole Proprietorship – One private who owns and operates a business.
Solicit – Attempting to sell insurance or asking or urging a person to utilize for a particular kind of insurance from a item visitor.
Solicitor – An individual licensed and appointed past an agent to solicit and receive applications for insurance equally a representative of the agent.
Sponsoring Insurance Visitor – The insurer a licensee represents in the sale of insurance products.
Stamping Offices – Non-turn a profit non-governmental agencies whose offices human action as a liaison between the surplus lines producer and the land insurance department. Stamping office duties vary among the various states in which they be. Responsibilities may include evaluation of insurance companies for inclusion on a white list, review of surplus lines policies, and didactics. Stamping offices are funded past stamping fees assessed on each policy of surplus lines insurance written in the state.
State of Domicile – Land in which insurer or bureau was organized and founded.
Superintendent – The title of the head of the section of insurance in some states. See Insurance Commissioner.
Surety – An insurance or bond that covers obligations to pay the debts of, or default of another, including faithlessness in a position of public or individual trust.
Surplus Lines Insurance (SLI) – Products are sold by authorized nonadmitted companies. SLI companies provide access to products not available in a land.
Surplus Lines Banker License – License issued to a person or firm to place risk insurance with eligible surplus lines insurers.
Suspension – A license that is temporarily invalid pending a decision by the commissioner considering a licensee has violated insurance laws or for unethical behavior.
Temporary License – A resident bidder may apply for and receive a temporary license in some states prior to meeting the prelicense didactics and license examination requirement.
Termination for Cause – The counterfoil of the relationship between an insurance producer and the insurer for one of the reasons listed in Section 12 of the PLMA.
Terminated License – A license that has been cancelled suspended or revoked. See Cancellation, Revoked and Suspended.
Tertiary-Party Ambassador (TPA) – An organization or business firm that administers self-insured funds or multiple employer trusts.
Title Agents – Functions of title insurance agents include conducting title searches, performing underwriting functions, preparing and issuing title insurance commitments and policies, maintaining policy records, and receiving premiums. In addition, many title agents perform real estate closings, and provide settlement and escrow services.
Uniform Awarding – Applications developed by the PLWG bachelor for resident and nonresident producer licensing, business entities, adjusters and Third Party Administrators.
Uniform Licensing Standards (ULS) – Ready of standards adopted by the Producer Licensing Working Group for the purpose of implementing uniform standards amidst the states.
Viatical or Life Settlement – The owner of a life insurance policy sells the right to receive the expiry payment to a third-party. Typically the owner insured receives a cash payment and the buyer agrees to make whatsoever remaining premium payments on the policy. Sellers of viatical plans are required to show proof of financial responsibility through a surety bond, certificates of deposit or securities.
Note: Special thanks to the Securities and Licensing Association (SILA) for providing united states of america with this insurance licensing terminology. Visit their website at www.sila.org .
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