Management

Types of Insurance Licenses

Posted on by Jan Kelly

Types of Insurance Licenses

Every state has a Department of Insurance that governs the insurance business in that particular state. In the first few pages of the Department of Insurance code book a paragraph states something close to, “Those who sell, present insurance or insurance related products shall be licensed and shall operate under and within the authority of said license.”

In addition to an insurance agent’s license, there is also an insurance broker’s license and a solicitor’s license for those who work in an agent’s or broker’s office and communicate with the general public about insurance policies.

For the dealership and F&I industries, there are only a few different license classifications to be concerned about.

Let’s review the specific F&I products and what insurance licenses they fall under. Please keep in mind that I am writing about generalities. Check with your own individual state Department of Insurance for verification.

Products:

    Credit life, and accident and health policies

License required:

    • Life and Disability License

Or

    •  a Life Only License in addition to a Property and Casualty License

Or

     a Limited Lines License, also known as a Credit Insurance License (Some states have these, others demand a class “A” insurance license.)

Licenses must be renewed and class “A” insurance licenses require continuing education. The required hours for continuing education vary with each state.

Please note that disability insurance falls under two types of licenses, both the Property and Casualty License, and the Life and Disability License.

1) Life Only License – Class “A” – This license is needed by those who sell life insurance, such as Met Life, New York Life, Symetra Life or United Life.

2) Life and Disability License – Class “A” – This allows the agent to sell hospitalization and disability insurance, in addition to other products offered by life insurance companies. The agent is appointed by each company he represents. In many states, F&I personnel must have this license to sell credit insurance policies. These are the states that do not have the Limited Lines License available.

3) Limited Lines License – F&I people need this license in the state of Oregon to sell credit insurance. This takes a photo, fingerprints and a small processing fee. Credit insurance is so limited in scope that the Oregon Department of Insurance does not require a test for the license.

4) Property and Casualty License – This is what GAP usually falls under and it requires a test and continuing education. Some states require a Property and Casualty License to sell GAP policies and unemployment insurance policies.

In most states, service contract vendors are required to have a Property and Casualty License as service contracts usually fall under the property and casualty section of the insurance code.

Some states seem to approve GAP policies and then after awhile they rescind approval. Yet others modify what the policies can do for the customer in the event of a total loss. It is always best to check with the individual Department of Insurance to determine who is approved to do business within your state and what licenses both the vendor and the retailer of the product require.

Kelly’s Korner, December 2007, P. 15