Monday, December 5 2022

Insurance is a heavily regulated industry with complex requirements. If you plan to work as an insurance agent or broker, or start an insurance-related business, you must obtain the correct license (or licenses) before you can start selling products or services. This must be done for each state in which you plan to operate.

Failure to comply with trade license laws could result in the freezing of commissions, fines and the suspension or revocation of future trade licenses. Some states may also issue cease and desist orders preventing your company from doing business in that state. You may also be required to pay any unpaid customer claims.

With that in mind, let’s take a look at the issues that arise in this industry regarding business licensing requirements.

What insurance business licenses do I need?

Insurance license requirements vary by state. They also differ by role and type of insurance sold.

To understand which licenses are required when selling to resident business entities and non-resident business entities broken down by state, see our insurance licensing smart chart.

Business insurance license requirements by state smart chart

Understand what licenses are required when selling to resident business entities and non-resident business entities

Access the smart chart

How can I determine licensing requirements?

First, consider the states in which you intend to operate. Requirements not only differ from state to state, but they also vary depending on the role played by an insurance provider:

  • Agent/Producer: If you act as an insurance agent or producer, you are authorized to sell life, health, property and other forms of insurance. Agents can be independent (self-employed, representatives of several insurance companies and paid on commission) or exclusive or captive agents (representatives of a single insurance company and salaried or working on commission).
  • Broker: A broker will represent a consumer and help them find the best insurance policy for their needs at the best price. A broker represents the customer, not the insurance companies. To complete the transaction, they will turn the account over to an insurer or agent.
  • Adjuster: An adjuster determines how much an insurance company will pay when a claim is made for property damage or bodily injury. They typically inspect property and vehicle, interview claimants and witnesses, and review police reports.

Each insurance agent or business must obtain different licenses, and those licenses will differ depending on whether they have resident or non-resident status in the state where you operate.

What are the different types of insurance (lines of authority)?

You may need separate licenses depending on the type of insurance you sell. Here are the most common types of insurance:

  • Accident and sickness insurance
  • Bail insurance
  • Life insurance
  • Property and accident insurance
  • Title insurance
  • Travel insurance

Note: You may need to obtain more than one type of license.

How does the licensing process work?

To obtain an agency license, you must complete an application, include supporting documentation, and pay a fee.

As an agent/producer, you may be required to demonstrate your expertise through exams and ongoing training. Since criminal background checks are often done before licensing, you may also be subject to fingerprinting.

Once you have obtained a license, each state will require it to be renewed every one to three years.

What is the difference between main lines and limited lines?

The Producer Licensing Model Act (PLMA) defines six main lines of authority for insurance:

  1. Life
  2. Accident and health or illness
  3. Property
  4. Victim
  5. Variable life and variable annuity products
  6. Personal lines

PLMA also allows states to offer other lines of authority that allow licensees to offer a more limited range of insurance products. These limited lines are capped at nine per state and must include “basic” lines including car rental, credit, crops and travel insurance.

What is NAIC vs. NIPR vs. Sircon?

The National Association of Insurance Commissioners (NAIC) is a support organization that represents and is governed by the major insurance regulators in all 50 states. The NAIC has played a key role in standardizing the insurance licensing process by developing its uniform applications and advocating for their adoption by states. The NAIC also creates model laws and regulations.

The National Insurance Producer Registry (NIPR) is a nonprofit organization created by the NAIC to help states standardize how they share regulatory information for the insurance industry. From the NIPR portal, individuals and entities can apply for new licenses, renew licenses, and download required documentation, as well as access rules and regulations related to their state’s insurance governance framework.

Sircon is a web portal that allows individuals and agencies to request, renew and manage license portfolios. Many states use both Sircon and NIPR for insurance licensing.


Managing compliance obligations, especially license renewals, in an ever-changing regulatory environment, should be a big part of your business’ day-to-day operations. Keeping track of renewal dates, fees, and necessary documents can be complicated and time-consuming.


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