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Producer Licensing

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Challenges

Keeping track of the licensing status of multiple producers is an epic task under any circumstance. Add to that a large number of producers working across multiple lines of authority (LOA), in multiple states, and it becomes an eternal game of whack-a-mole to make sure your agency’s producers are actually licensed! 

Some of the questions that arise as growth-oriented insurance organizations pursue producer licensing:

  • How are we tracking which agents are licensed and appointed in different … States? LOA? Carriers?
  • Do we operate in states that require paper forms for the licensing or renewal process?
  • How do we know when our agents’ licenses must be renewed?
  • Should we use producers’ Social Security numbers to verify information? National producer numbers?
  • Does my state require a full background check?

The number of variations on this theme is not infinite, but it can certainly seem that way when you operate in multiple state jurisdictions. Further, manual processes introduce more points of possibility for human error—errors that can result in costly delays and wasted time rekeying essential information.

Best Practices

Impeccable record-keeping is a must, both for your own ability to appoint agents and in case of a compliance audit.

Be sure to collect the name of each producer as well as their license number – or numbers. Keep meticulous records of each expiration date, continuing education credits, and any other requirements. Using a source of truth such as NIPR, you can automate a check that verifies this information for you in real-time, as well as having the protection provided by NIPR’s audit log to prove dates of licensure in the rare cases state records go awry.

You should also implement a system to verify which agents could acquire or renew licenses in different states to grow their distribution network (and yours, as well). With all your producers’ license statuses available at a glance, create a schedule that makes sense for your agency to periodically review upcoming deadlines or potential compliance landmines. Once you get into a steady routine of monitoring and addressing these issues, you’ll avoid surprises that can result in violations and penalties. 

Producer Licensing FAQs

Because NIPR talks to other state systems, their information is always up-to-date, and factors in the numerous regulations specific to each state and region. Additionally, if a state can’t find your producer’s license, NIPR’s audit log can provide a source of validation.

While everyone in the product sales pipeline is responsible to some degree for ensuring producers are licensed for what they’re selling, traditionally agencies track the agents’ licenses and take the onus for renewals.

An insurance agent’s national producer number is like a Social Security number – it’s a unique identifier that all states use to track and validate which states, lines of authority, and appointments are associated with that agent.