TechGuard Insurance Solutions is a business entity located and licensed in State A. The agency wants to begin selling cyber liability policies to businesses located in State B. The agency designates an individual, Samuel, to act as the primary agent for these out-of-state sales. Samuel holds a valid resident producer license in good standing in State A. Under standard state insurance regulations, which of the following accurately describes the licensing requirements for Samuel to legally solicit and sell policies in State B?
- He must apply for a non-resident producer license in State B, which generally requires an application, a fee, and proof of his active resident license in State A.Answer
- BHe may immediately sell policies in State B using his State A resident license, relying on the doctrine of implied agent authority across state lines.
- CHe must apply for a temporary license in State B to establish a compliance record before he is permitted to apply for a permanent non-resident license.
- DHe must surrender his resident license in State A and obtain a broker license in State B in order to legally conduct interstate insurance business.
Answer
Samuel must apply for a non-resident producer license in State B, providing an application, fee, and proof of his home state license.
Under the principle of reciprocity established by standard state insurance regulations, a producer who holds an active resident license in good standing can legally operate in a different state by obtaining a non-resident license. This process typically waives the examination requirement, provided the producer submits the proper application, pays the required fees, and demonstrates their home state license is active.
Step-by-Step Solution
Key Concept
Non-Resident Licensing and Reciprocity