At Tuscano, we often run into situations where licensing is an issue. We thought we would share a couple of the most frequently asked questions and hope these help you when writing brokerage business with Tuscano.
Yes! Both the individual producer and the agency must hold a Producer License. The only exception is if you are a sole proprietor in which case you do not need a business entity license.
Anyone who sells, solicits or negotiates contracts of insurance, needs to be licensed. In the state of Pennsylvania, these individuals need to be licensed as a producer. By law, a Producer can act as a representative of the insurer when she or he is appointed by that carrier. A Producer is also permitted to act as a representative of the consumer when you are placing the business with a carrier that has not appointed you, such as when writing business with Tuscano Agency. As such, Tuscano will only do business with licensed Producers.
Do you like to be paid commissions when you produce a piece of business? If so, then whoever is being paid, the agency or the producer directly, must be licensed to receive commissions for the sale of insurance.
New York is an exception to the Producer License model. Instead of a Producer license, New York has two licensing levels. A New York Producer license allows you to act as the agent of the insurer only. If you wish to broker business (act as a representative of the consumer and place business with a wholesale broker) you must hold a Broker license as well. Note this license is not the same as the New York Producer license. Check your license number – if it begins with a PR it is the producer license. It must begin with a BR in order for you to place business in the excess lines (wholesale) market.
YES! To put it simply, you must hold a license in the home state of the insured. The home state is typically defined as the state of the policy holder’s residence or the state where the insured’s business resides. This is further complicated by customers who have multiple residences or multiple locations. In the end, the home state is typically where the policy holder resides the majority of the time, or where the largest business exposure is located. Simply put, you must be licensed in the policy holder’s home state.
Most states require licensing for the individual and business entity so be very careful to be sure that you are properly licensed as a nonresident when placing business in other states. If you need to obtain your nonresident license, visit the National Insurance Producer Registry (NIPR) www.nipr.com where most states allow you to apply electronically.
Remember you can update your licensing information for both the agency and the individuals on Tuscano.com!