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Expanding Territory: Getting a Non-Resident Insurance License

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Fran Majidi June 17, 2020
non-resident insurance license for insurance agents

The insurance industry requires a license to sell insurance. At SmartFinancial we not only advise insurance agents to diversify and sell as many lines of insurance as possible, but we also encourage insurance agents to expand their territories and even consider applying for a non-resident insurance license near their home state. It's not very difficult getting the same license type or types that an insurance agent already has.

If you're an insurance agent who wants to sell in all 50 states, you’ll need to get licensed in each one.

If you're an insurance agent who wants to sell in all 50 states, you'll need to get licensed in each one because there is no one license to satisfy every state. This is because state requirements vary, whether you sell health insurance or car insurance. You'll need to show your license number to the insurance department in each state before you can sell insurance.

The non-resident license application is straightforward.

The non-resident license application is straightforward. Here's everything you need to know.

Insurance Producer License

It's important to keep in mind that you are only allowed to sell insurance or even to have conversations about it in a state where you hold a license. Yes, if you're on a trip in Hawaii and your insurance business is only licensed to sell in California, you are technically breaking the law if you discuss insurance in any detail.

Many insurance agents who live along the border of two states have multiple licenses for this reason. While it may have felt like a hassle getting both licenses, these agents are better off in the long-run because they can buy insurance leads in both states, opening up the market to sell lots of policies.

In the ideal scenario, you have multiple state licenses and you’re selling multiple lines of insurance.

In the ideal scenario, you have multiple state licenses and you're selling multiple lines of insurance. In this very competitive environment, expanding beyond home and auto or -- vice versa -- life and health will be key to creating a sustainable business in the long haul. So will selling as many kinds of insurance in as many states as possible.

What Is the National Insurance Producer Registry (NIPR)?

The National Insurance Producer Registry (NIPR) is a not‐for‐profit technology company that provides uniform licensing data and compliance services for insurance producers and agents. Together with the NAIC and other insurance industry regulators, NIPR protects and serves insurance consumers.

NIPR provides producer licensing information from all fifty states, the District of Columbia, and four U.S. territories. The company claims that its products and services "eliminate paperwork and data entry, allowing for increased productivity, and faster turnaround time for the producer licensing process."

Visit the Department of Insurance Website

Here you'll find out what the requirements and fees are for getting a non-resident license in the state(s) you're interested in selling insurance. In some states, you'll need to pass the state licensing exam, but in others you do not if you already are licensed in your resident state. Even if you don't have to take an exam, you still have to apply for a non-resident license.

If you work for a big agency or are growing one, you'll need to apply for a license in all the states you're required to sell in. You also have to have an insurance license in your resident state at all times. That may add up to be many licenses and licensing fees but there's simply no way around it. You may have to pass the state exam, which will be similar to your home state licensing exam (minus a few rules here and there). You'll need to pass the written exam in order to get licensure to operate in that state.

What's a Producer Number?

Your producer number is the same as The National Producer Number (NPN), which is assigned through the National Association of Insurance Commissioner's (NAIC's) licensing application process. The NPN is used to track individuals and business entities on a national level. If you sell insurance in New York, you'll use the same producer number as you would if you also sell in New Jersey or other states.

Every insurance agent or insurance business entity has a producer number. Whether you try to get a resident license or non-resident licenses, you'll need to verify your legal capacity to sell on behalf of insurance companies with this unique identifier. If you're not sure how to retrieve your producer number, contact the National Insurance Producer Registry (NIPR).

What Is a Line of Authority in Insurance?

A Line of Authority (LOA) is a general subject area of insurance that a producer can be licensed to sell.

  1. Life – Insurance coverage on life, including benefits of endowment and annuities, and may include benefits in the event of death or dismemberment by accident and benefits for disability income.

  2. Accident and health or sickness – Insurance coverage for sickness, bodily injury or accidental death, and may include benefits for disability income.

  3. Property – Insurance coverage for the direct or consequential loss or damage to property of every kind.

  4. Casualty – Insurance coverage against legal liability, including that for death, injury or disability, or damage to personal property.

  5. Variable life and variable annuity – Insurance coverage provided under variable life insurance contracts and variable annuities.

  6. Personal lines – Property/Casualty.

What's a Reciprocal Agreement?

A reciprocal license agreement is an agreement that makes issuing non-resident insurance licenses much simpler and with fewer requirements. For instance, there are pre-licensing courses, fingerprinting and exams that will be waived. All you have to do is pay an application fee and have your resident insurance license to be eligible. Most states have a reciprocal agreement when it comes to licensing agents who already are licensed in their home state.

Some states, like Florida and California, have more requirements, including fingerprinting. Some states require pre-licensing courses for non-residents.

Reasons Why You'd Need Multiple Insurance Licenses

  • Your business operates a call center in multiple states

  • You write a national program

  • You market insurance across the U.S.

  • Your staff provides quote or policy benefits information to people in several states.

Insurance Leads for Multiple States

When you buy the best leads from SmartFinancial, you determine where you want the leads to come from by choosing area codes for the regions you want to cover. The more zip codes, the higher the yield.

Buying insurance leads is a necessary component of any healthy insurance agency budget. After the Covid-19 pandemic began, more agents began using leads to grow their businesses. The freedom that comes with being able to do business just about anywhere creates potential sales you may have never had otherwise.

The best lead providers, like SmartFinancial, will pair you with an Account Manager for the life of your account. This point-person will be on top of your account at all times, making the appropriate adjustments that will help you gain more sales.

Your Account Manager's number one job is to grow your business. This point person will be there if you have a question about how to get better results. They will also help you target the best areas in the states you are licensed in, based on the risk profile your agency prefers.

You will either have your insurance leads sent to your email address or you may get calls transferred to your phone number of choice.

You will either have your insurance leads sent to your email address or you may get calls transferred to your phone number of choice.

Does an Insurance Agent with a Non Resident License Have to Travel Much?

If you decide to do business in another state, it doesn't mean you need to travel either. The technology available allows you to hold meetings from just about anywhere and even get documents signed online after you sell a policy. Using Zoom or FaceTime is highly encouraged. Sometimes a prospect is more open to doing business with someone if they just see the person on the other end of a conversation. There's a lot to be said for body language and facial expressions, hand gestures. Much more is communicated when two people sit face-to-face and discuss important matters, like insuring one's health, life, business or property. Start expanding today, without ever leaving home!