Licensing Flashcards
Persons required to be Licensed
A person shall not sell, solicit, or negotiate insurance in this state for any line or lines of insurance unless the person is licensed for that line of authority in accordance with this chapter. A person must be competent (pass state examination), honest, and trustworthy (submit to fingerprinting and a background check – no felonies and compliant with DSHS orders), complete the required pre-license education requirements (20 hours per line), and be at least 18 years of age to be licensed Individuals must apply to Insurance Department for a license (online) and pay the initial licensing fee.
Producer
Producer means a person required to be licensed to sell, solicit, or negotiate insurance. This does not include a title insurance agent or surplus lines broker.
A producer may act as an agent or a broker. To act as an agent of insurers the producer must be appointed by those insurers. (An appointment is a notice sent by the insurer to the IC stating the producer represents them.) To act as a broker, who represents the applicant, the producer must have a bond. The bond is the greater of $2,500 or 5% of the brokered premium the previous year. (Important: Agents represent insurers and Brokers represent the applicant or insured.)
Life producers selling variable products must be FINRA (securities licensed) registered.
Temporary License
Temporary licenses may be issued by the IC because of death or disability of a producer not to exceed 180 days to:
The surviving spouse or court-appointed personal representative
A person of a business entity licensed as a producer is to be designated as the licensed producer.
The designee of a licensed producer entering active military service.
Others, where the IC deems public interest, will best be served.
The temporary licensee may be limited by the IC.
The temporary licensee may be required to have a suitable sponsor.
The temporary license ends upon disposal of the business.
Non-Resident License
Nonresident license may be issued to producers in good standing in their home state, for the same lines of insurance, if that state reciprocates with WA. No fingerprint card is necessary if required by the resident state and no test is required. Continuing education is also reciprocal. The IC must be appointed by the producer to receive service of legal process issued against the producer.
Licensing Exemptions
An insurer.
Officer, director, or employee of an insurer not receiving commissions.
An employer providing insurance benefits and not compensated in any manner.
A person advertising in this state as part of a multiple state ad, who does not sell in WA.
A person forwarding group credit insurance applications who receives no commission.
Appointments/termination of appointments
An appointment (or affiliation) is an authorization given by an insurer or agent to a producer, granting permission to represent the company/agency in transacting insurance business on their behalf. Appointments - are required from each insurer a producer represents. Insurance producers upon initial appointment by an insurer must be authorized to transact at least one line of authority within the authority of the insurer or the business entity. Unlicensed individuals will be denied an appointment. The insurer must (electronically) file a notice earlier than 15 days of the agency contract or when the first application is submitted and pay the appropriate fee. Appointments are continuous but must be renewed (by the insurer or agent). Business entities (insurance agencies) may submit an affiliation notice. The commissioner will confirm the licensee's appointment or affiliation by sending an electronic message to the party requesting the appointment. Ineligible producers, who solicit insurance for an insurer, subject themselves and the insurer to disciplinary action. The contract will be effective, but no commission shall be paid. The OIC will email the insurer a renewal notification 60 days prior to appointment expiration. Appointments canceled by the insurer, or producer, require notification to the OIC Producers and Surplus Lines Brokers may request termination of an appointment (or affiliation) by sending an advance written notice to the insurer and an email copy to the insurance commissioner. An insurer/agency may terminate an appointment/affiliation of an insurance producer. Insurers/agencies must notify the insurance commissioner of the termination of a producer within 30 days of termination. The effective date of termination is the date of receipt by the OIC. Termination for cause (ethical or statute violation) may require additional information to be filed immediately.
Penalties for non-compliance
Suspension/revocation. Suspension may be for a maximum of 12 months. The producer is informed, in advance, of the start and end date of a suspension. A license shall be suspended for non-compliance with a DSHS order (Department of Social and Health Services). Revocation of a producer’s license may be permanent.
The Commissioner must provide a 15 day written notice (3-day notice if for public safety) prior to suspension or revocation of a license.
A revoked or suspended license shall be surrendered.
Probation: The commissioner may probate a suspension or revocation of a license under reasonable terms determined by the commissioner. In addition, the commissioner may require a licensee who is placed on probation to:
(1) Report regularly to the commissioner on matters that are the basis of the probation;
(2) Limit practice to an area prescribed by the commissioner; or
(3) Continue or renew continuing education
Violations of probation may result in the enforcement of the IC’s original order.
Fines: The Commissioner may levy a civil penalty or any combination of action or violations of the code
Maintenance and duration of the license
Initial and reinstated individual licenses are valid from their date of issuance until the end of the licensee’s next birth month plus one year.
After the initial renewal, licenses are valid for two years and must be renewed prior to the end of the birth month of the licensee.
Renewal filed with the IC before expiration, allows a producer to continue to act under his license.
A producer unable to renew because of military service or disability may request a waiver.
Licensees must inform the IC of an address or email change within 30 days (this includes any change in the person’s residence, mailing, business address).
A business entity’s license is valid for two years from issuance.
Continuing education
Resident producers in life, disability, personal lines, property, casualty, or variable insurance must meet continuing education requirements. Exempt: adjusters and limited lines licensees.
Requirements:
24 credit hours of which 3 hours must be in ethics. Producers needed to complete courses required to sell specific insurance plans (e.g.; Annuities and Long Term Care) may count those credits toward renewal CE.
Course completion within 24 months of license expiry.
No hours may be carried over for the next renewal.
Waivers may be granted for medical reasons or military mobilization.
Late renewal/reinstatement
Late renewal fee consists of the renewal license fee and a surcharge: 50% surcharge after the license expiry date for the first 30 days late; 100% after 30 days up to 60 days late; after 60 days to 12 months late, 200% and license reinstatement.
Reporting of Actions
Any insurance producer (along with title insurance agents and adjusters) having administrative action taken against them in another jurisdiction, or by another governmental agency in this state, shall report it to the commissioner within thirty days of the final disposition of the matter.
The report shall include a copy of the order, consent to order, or other relevant legal documents.
This also applies to any criminal prosecution of an insurance producer taken in any jurisdiction. The report shall include a copy of the initial complaint filed, the order resulting from the hearing, and any other relevant legal documents.
Designated Responsible Licensed Person
The designated responsible licensed person (DRLP) must be given the necessary authority and information by the business entity that reasonably assures that the DRLP can cause or influence the entity’s compliance with all applicable insurance laws or rules, or both of this state.
