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. What is generally required for this producer to legally sell insurance in the neighboring state?
- AThe producer must obtain a non-resident license in the neighboring state.
- BThe producer must pass the full licensing exam again in the neighboring state.
- CThe producer needs only to notify their home state's Department of Insurance.
- DThe producer must establish a physical office in the neighboring state.
Show answer & explanationAnswer & explanation
Correct answer: A. The producer must obtain a non-resident license in the neighboring state.
To legally sell insurance in a state where they are not a resident, a producer must obtain a non-resident license. This allows them to operate under the laws of the new state without having to re-qualify as a resident.
Why the other options are wrong
- B. Passing the full exam again is generally not required for non-resident licensing due to reciprocity agreements.
- C. Simply notifying the home state is insufficient; the new state must grant a license.
- D. Establishing a physical office is not a universal requirement for non-resident licensing.
Non-Resident License
A license issued by a state to a producer who is already licensed as a resident in another state, allowing them to transact insurance business in the issuing state.
- Required for out-of-state business.
- Often granted based on reciprocity.
- Does not require re-taking the full exam.
Memory trick: Resident license is home base, non-resident is for travel.