The following opinion piece is written by Todd Bryant, Founder and Chairman of Bryant bonds.
California law requires you to obtain a license if you wish to become an insurance broker in the state. To become a broker, you must complete a list of pre-licensing requirements. You must also submit an application, relevant documents and comply with the bond requirement.
Here are the steps you need to take to get your California insurance broker license.
Choose a license type
California insurance broker licenses come in different classes depending on the type of license you want to specialize in. The specialties include:
- Accident and health
- Personal lines
The area of specialization you choose will determine the courses and exam you take in order to obtain a license. When choosing your license class, you should also choose the type of license you want to get. There are three types of licenses:
- Individual resident permit
- Individual Non-Resident Permit
- Business entity license
Your choice of license type will also require you to cover slightly different pre-license requirements.
Meet the pre-license requirements
Take an education course
Once you have chosen your type of insurance broker license, you can continue to cover pre-license requirements. This includes taking pre-licensing training courses as well as passing an exam.
All applicants are required to complete 12 hours of pre-licensing training in ethics and the California Insurance Code. In addition to this, applicants are required to complete an additional 20 hours of general insurance pre-license training in the field in which they wish to specialize.
Applicants who wish to specialize in two areas can take 40-hour courses that combine either “property” and “accidents” license courses or “life” and “accidents and health” courses.
Once you have completed the education, you will receive a Certificate of Completion which is valid for three years. You will need to submit this certificate to the California Department of Insurance when you apply for your license.
Submit your fingerprints
You will need to submit your fingerprints before taking the licensing exam or on exam day at the exam site. Getting the fingerprints earlier is preferable as it will help process your license application faster.
If you decide to take your fingerprints first, you can use the fingerprint provider from the Department of Insurance or providers approved by the Department of Justice.
Take the licensing exam
To attend the licensing exam, you will need to register in advance and pay an exam fee. You can either schedule your exam at the Department of Insurance or online through the PSI Exam Service. You must bring a valid ID to attend the exam.
To pass the exam, you must achieve at least 60%. If you pass the exam, you will be notified and can continue to submit your application and your insurance broker surety.
Fulfill the license conditions
To fulfill the license conditions, you will need to submit your online application, your bond, and pay a license fee. You may also need to submit additional documents depending on the types of specialization you have chosen.
To complete and submit your California insurance broker license application, you can use the Quick License Application (FLASH) service.
To complete your application, you will need to provide information regarding your license type, address, work and personal background, a variety of licensing questions, and questions regarding your pre-license training and exam. When applying, you will also be asked to pay your license fee which is $ 170 for all license types except bail officers who have to pay $ 566.
Finally, once you have completed and submitted your license application, you will need to secure a $ 10,000 bond for a California insurance broker and submit it to the Department of Insurance. After that, and if your application is approved, you will be successfully licensed as an insurance broker in California.
What is the California Insurance Broker Surety and why do i need it?
If this is your first surety bond, you may be wondering why you need a bond. Bonds are agreements between the licensee (the future broker), the licensing institution (the Department of Insurance) and the surety company.
This legally binding agreement ensures that licensed insurance brokers in California will comply with California code and regulations in performing the work of insurance brokers. This ensures that they will act with honesty and professionalism.
If a broker violates this agreement, the Insurance Department can file a claim against their surety. The surety who issued the bond then investigates the situation. If he finds that the broker has acted dishonestly by committing fraud, for example, the surety will pay compensation up to the total amount of the surety – $ 10,000.
Do I have to pay $ 10,000 to get bail from California insurance broker?
No, to get a deposit you only have to pay a small percentage of that amount. The amount of $ 10,000 is what is known as the bond amount – the maximum amount of compensation that the surety can give for a claim against the bond.
The exact cost of obtaining your deposit is determined when you submit an application. The surety then examines your financial stability, such as your personal credit rating or financial statements, and offers you a rate at which you can get your surety.
Applicants who have a high credit score are usually required to pay a very small percentage in order to be bonded.
Questions about the deposit
Do you have questions regarding surety bond requirements for insurance brokers in California? Leave us a comment below, we’d be happy to help!
The previous article was written by Todd Bryant, Founder and Chairman of Bryant bonds. The opinions expressed herein do not necessarily reflect those of Insurance Business.
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