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Glossary
Here you’ll find a glossary of key terms and definitions.
A
Affiliation
There are 21 states that require the agency to file an affiliation for either the DRLP only or in some states for every agent selling insurance products in their state under an agreement with the agency. All but three states use the term “affiliation” for this relationship between the agency and a contracted agent while FL and TX label them a “designation” or “appointment” and CA labels them an “endorsement.”
C
Captive/Exclusive Agencies
A captive or exclusive insurance agency works for and sells for one carrier only. A captive agency receives support from their associated carrier through advertising, location, and referrals but a captive agency is limited in what policies and products the agents can sell.
Co-Code
A co-code, also known as a company code, is a five-digit number assigned to all insurance companies by the NAIC for filing financial data. Carrier appointments include the co-code of the specific carrier that the individual/firm is appointed within the state.
For more information:
D
Designated Home State
If an adjuster lives in a “non-licensing state,” meaning that their resident state doesn’t license adjusters, they can choose a designated home state to serve as their resident state. All adjusters with a designated home state are required to complete the pre-licensing and educational requirements of their selected home state.
For more information:
Detail Report
The detail report allows a user to view all information for a single producer, company, or agency, such as demographic information (name, address), license information (states licensed, license number, status, and lines of authority), appointment information (company appointments, effective date, termination date, and termination reason) and any reported regulatory actions. The detail report can be requested with the data being returned as an XML which allows the data to be compatible with all computer networks, data structures, and operating systems.
DRLP
A designated responsible license producer (DRLP) is a producer assigned by a business entity to ensure compliance with the laws and regulations of the state. While each state’s policies differ around DRLPs, most states allow for more than one DRLP, and the DRLP must hold all lines of authority that the business entity they represent hold. Some states refer to the DRLP as Designated Responsible Person.
For more information:
F
FEIN
An acronym for Federal Employer Identification Number, the FEIN is a 9-digit number assigned by the Internal Revenue Service (IRS) to identify a business operating in the US for tax purposes. All companies that have employees, are structured as a corporation or partnership, or file certain tax returns for small businesses must have a FEIN.
For more information:
I
Inactive Licenses
Can indicate a license that has lapsed due to failure to renew on time or failure to have an active appointment or affiliation (in states that require it) but can also be a license that the state has rescinded due to some regulatory action.
Independent Agencies
An independent agency is able to contract agents underneath them to sell the products of multiple insurance carriers.
Insurance Agency
An insurance agency is an individual or company made of agents who solicit and sell insurance on behalf of one or more carriers. There are two types of insurance agencies: captive/exclusive agencies who sell policies from one insurance carrier and independent agencies who sell policies and products from multiple insurance carriers.
For more information:
https://www.fsinsuresme.com/insurance-agency-vs-insurance-company-whats-the-difference
https://smartmoveinsurance.com/uncategorized/difference-insurance-agency-insurance-carrier
Insurance Adjuster
An individual who evaluates coverage and determines the amount of loss suffered. Generally, there are three types of adjuster licenses: company (or staff), independent, and public.
Insurance Carrier
An insurance carrier is the company that provides the insurance coverage. While many individuals go to an agency to purchase insurance, it’s the insurance carriers that hire underwriters, handle insurance claims, and issue payments. An individual or firm must be both licensed by the state and appointed in the state by any insurance carrier whose products they want to sell.
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Insurance Core Lines
Core lines refers to the so-called “core” limited lines of authority:
- Car Rental
- Credit
- Crop
- Travel
Insurance Producer
An individual or firm that is licensed to sell the typical lines of insurance in a state. Sometimes also referred to as an Agent/Agency.
J
Just-in-Time Appointments
In those states that permit JIT appointments, carriers may wait to file the appointment until after the first piece of business is generated by a new producer. The appointment request must then be submitted to the state insurance department (DOI) within a specified period of time.
L
Line of Authority (LOA)
A line of authority (LOA) is a general area of insurance where producers can be authorized to do business.
M
Major Lines
The NAIC’s Producer Licensing Model Act (PLMA) defines the six major lines of authority for insurance as follows:
- Life
- Accident and Health or Sickness
- Property
- Casualty
- Variable Life and Variable Annuity
- Personal Lines
For more information:
https://www.naic.org/store/free/MDL-218.pdf
MGA/MGU
A Managing General Agent (MGA) is a type of wholesale broker that sits between a licensed agency/agent and the insurer in the Insurance Distribution Channel. MGAs, like most wholesale brokers, recruit agencies and agents to sell the insurance products of one or more insurance carriers. This includes assisting the agency/agent with obtaining the required licenses. However, unlike a typical agency that would perform these services, an MGA also takes on some of a carrier’s responsibilities such as binding coverage, underwriting and pricing, settling claims, and appointing retail agents in a certain region.
N
NAIC
The National Association of Insurance Commissioners (NAIC) is the U.S. regulatory support association governed by insurance regulators from the 50 states, the District of Columbia, and 5 U.S. territories. Through NAIC, state regulators establish standards and best practices, conduct peer review, and coordinate regulatory oversight. NIPR partners closely with NAIC as an independent non-profit affiliate.
For more information:
NIPR
The National Insurance Producer Registry (NIPR) is a non-profit partnership with the National Association of Insurance Commissioners (NAIC) to streamline licensing data and compliance services for insurance professionals. NIPR serves as a centralized resource of producer licensing information for all 50 states, D.C., and U.S. territories, as well as an electronic communication network to apply for licenses, appointments, and terminations.
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NPN
An NPN (National Producer Number) is a unique identifier assigned to producers through the NAIC (National Association of Insurance Commissioners). The NPN is the primary tracker of insurance-related activities for both agents and entities.
For more information:
P
PDB (Producer Database)
The Producer Database (PDB) is the single source of truth for producer licensing information from participating state insurance departments. Currently, all 50 states, Washington D.C., Guam, Puerto Rico, and the Virgin Islands, are included on the PDB. The PDB contains and regularly updates agent demographic information, updated license information, appointment information, and reported regulatory information. *Not every state posts everything to PDB.
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Personal Lines of Insurance
Personal lines of insurance protect individuals against the financial losses that result from various personal risks. Examples of personal insurance coverage include protection from financial risk related to death, injury, or property loss.
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R
Registry Appointment
A term coined by AgentSync to identify appointments in states that don’t require or accept appointment transactions but do require the carrier to track all agents selling on behalf of the carrier in their state and be prepared to send that list upon request from the state.
Reinstatement Period
A reinstatement period is a grace period for an agent whose license has lapsed due to failure to renew or meet continuing education requirements. If the agent meets the criteria to renew during the reinstatement time frame, the agent can apply to reinstate their license. State rules vary greatly based on the renewal period time frame and what requirements are.
Retaliatory Fee
A state’s insurance department may impose a fee upon insurance professionals in another state to match what that state charges its residents for licenses. This is called a retaliatory fee (a higher or additional fee).
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