Property & Casualty Insurance Exam (National Portion)Producers and AdjustersEasy
An insurance producer, licensed in one state, wishes to conduct insurance business in a neighboring state. The neighboring state's insurance department requires the producer to apply for a specific type of license to operate legally within its borders. What type of license is the producer seeking?
- ABroker's license
- BNon-resident license
- CResident license
- DTemporary license
Show answer & explanationAnswer & explanation
Correct answer: B. Non-resident license
A non-resident license is required for an insurance producer to sell insurance in a state where they do not reside, provided they hold a resident license in another state.
Why the other options are wrong
- A. A broker's license refers to the capacity in which the producer acts (representing the insured), not the state of licensure.
- C. A resident license is for the state where the producer lives and has their primary place of business.
- D. A temporary license is typically issued for a limited period under specific circumstances, such as a producer's death or disability.
Non-Resident License
An insurance producer holding a resident license in one state must obtain a non-resident license to legally transact insurance business in another state.
- Required for out-of-state business.
- Requires an active resident license.
- Ensures compliance with local regulations.
Memory trick: Don't cross borders without your non-resident papers!