Licensing of Agents, Brokers, Limited representatives and adjusters

agent

- a person licensed to solicit applications for, or negotiate a policy of insurance. An agent represents the insurance company in the transaction of insurance.

Broker

- a person who is a licensed "agent" that procures insurance on behalf of a third party (the insured). A broker represents the insured in the insurance transaction. To become a "broker", you must post a $15,000 bond in favor of the State.

limited representative

- a person who is authorized to solicit or negotiate particular kinds of insurance: a. Credit Life, Credit Accident and Credit Health b. Credit insurance c. Travel Accident and Baggage d. Motor Club e. Dental Services f. Credit Property Insurance made in connection with a loan g. Single Interest Automobile Physical Damage Insurance made in connection with a loan h. Bail bonds executed or countersigned by surety bondsmen i. Credit unemployment j. Vehicle service agreements and mechanical breakdown insurance k. Prearrangement Insurance when offered or sold by a preneed sales licensee

Representations (GS 58-33-20)

1. "Agents" represent the INSURANCE COMPANY in a dispute. This does not affect the agent's apparent authority. 2. "Brokers" represent the INSURED in a dispute.

License Issuance and Continuation (GS 58-33-30)

1. Agents MUST: a. be 18 years old, b. be of good character, c. have prescribed education and training, d. pass the State licensing exam, and e. pay the licensing fee. 2. Brokers MUST: a. hold a valid "Agents" license, and b. post a $15,000 bond in favor of the State. 3. Non-Resident Agents: a. If a person lives in a county of another State that borders North Carolina, he may be licensed as a resident agent; b. A person living in another state holding a valid license in that state may be licensed as a non-resident agent in North Carolina; c. No exam is required for a non-resident license if the state of residence requires an exam

Agent's Liability (GS 58-33-95)

1. An agent is personally liable on all contracts of insurance placed with a carrier not authorized to do business in North Carolina. 2. An agent found guilty of unlawfully soliciting insurance for an unauthorized company shall be guilty of a MISDEMEANOR.

Exemption from Examination (GS 58-33-35)

1. Any applicant who has held a license in another state in the past two years; 2. Any applicant for a Life or Accident & Health License holding the following: a. CLU b. ChFC c. LUTCF d. FLMI 3. Any applicant for a Property or Casualty license that holds the CPCU 4. Applicants for license as "Limited Representatives" or motor vehicle damage appraisers. 5. Agents for town or county farmers mutual

Signing blank policies (GS 58-33-110)

1. Guilty of a misdemeanor 2. Upon conviction - fined not less than $1000 nor more than $5000 3. Transportation accident policies sold in coin-operated vending machines may be signed in blank.

V. Continuing Education (GS 58-33-130)

1. If you have one or more major lines-of-authority license (i.e. Property, Casualty, Life or Accident, Health & Sickness) you are required to complete 24 hours of continuing education every 24 months (biennium). 2. No more than 75% of the hours required for Life & Health may be taken from a company you represent. 3. You may carry over an unlimited number of Continuing Education hours from one biennium period to the next.

Appointment of an "Agent" (GS 58-33-40)

1. No individual who holds a valid agents license can sell insurance for a company they are not appointed with. 2. Any insurer can appoint any person licensed as an agent by the State. 3. The company must notify the Commissioner of all appointments. 4. Appointments continue: a. as long as the agent is properly licensed, b. as long as the appointing insurer is authorized to transact business, c. until the appointment is cancelled. d. The insurer must notify the Department in writing within 30 days of the cancellation of an appointment. 5. Prior to April 1 of each year, the Company must renew each appointment and pay a fee.

Prohibited rebates and inducements (GS 58-33-85)

1. No insurer or agent shall receive a premium except in accordance with an approved filing. 2. No agent shall pay as an inducement to buy insurance any rebate, discount, credit or reduction in premium

Temporary License (GS 58-33-65)

1. The Commissioner may issue a Temporary License without an examination to: a. The spouse or next of kin or executor, or employee, in the case of death or disability of a licensee; b. A member, employee or officer of a licensed partnership or corporation in the event of the death of an individual licensed in the company; c. The designee of anyone entering the armed services. 2. The person receiving the temporary license must be qualified in every way except training and experience. 3. The temporary license is only good for 180 days.

Denial, suspension, revocation, or nonrenewal of licenses and appointments (GS 58-33-45)

1. The Commissioner may suspend, revoke or deny a license, after a hearing, if he finds any of the following to be true: a. Untrue material statement on the application, b. Violation of or noncompliance with any insurance laws, c. Obtaining a license through fraud or misrepresentation, d. Improperly using money that belongs to policyholders, insurers, beneficiaries or others, e. Willfully OVER insuring property, f. Conviction of a misdemeanor involving moral turpitude or a felony, g. Found guilty of an unfair trade practice, h. Found to be dishonest or incompetent, i. Your license has been suspended in another state, j. Forged another's name on an application, k. Cheated on the licensing exam 2. If the Commissioner finds that public health, safety or welfare requires emergency action and incorporates this finding in his order, summary suspension of a license may be ordered.

Surrender, loss or destruction of license (GS 58-33-50)

1. The Commissioner will notify all appointing insurers of a suspension or revocation, 2. The Commissioner will notify NAIC, 3. If you move out of State, you have 30 days to surrender your license, 4. A duplicate license will be issued if your license is stolen or destroyed - for a fee.

Countersignature and Related Laws (GS 58-33-60)

1. There is no requirement that a licensed resident agent or broker must countersign for a non-resident agent or broker; 2. If the State of residence of the non-resident agent requires a countersignature, North Carolina will also require a countersignature.

Scope (GS 58-33-1)

1. This article applies to the qualifications and procedures for licensing: a. agents, b. brokers, c. limited representatives, d. adjusters, and e. motor vehicle damage appraisers. 2. All references to life insurance include annuities

General License Requirements (GS 58-33-25)

1. You cannot act as an agent unless you are one. 2. You can only sell the kinds of coverage you are licensed to sell. 3. An "agent" or "broker" may be licensed to sell the following kinds of insurance: a. Life b. Accident, Sickness & Health c. Property d. Casualty e. Title f. Automobile Physical Damage g. Medicare Supplement and Long Term Care 4. A Life license allows the agent to sell VARIABLE products if NASD requirements are met. 5. No agent may do business with a company not authorized to do business in this State unless permitted under the Surplus Lines Act. 6. No agent may do business with a company he/she does not represent. 7. A partnership or corporation can be licensed. Commissions can only be paid to a licensed person. 8. Controlled business cannot account for more than 50% of the agent's business. 9. Commission cannot be directly or indirectly paid to any person not licensed. 10. An agent can assign his commissions to the company he works for. 11. Your license must contain the information the Commissioner feels is important (SS#, Name, Picture, etc.) 12. Your license is good until revoked. 13. The following persons are not required to be licensed: a. Salaried employees of an agency or insurance company whose duties DO NOT include negotiation or solicitation of insurance. b. Persons paid to enroll employees in group life or group health plans. c. Employees who operate a group trust for the benefit of their own company. d. An agency employee acting (1) within the confines of the office, (2) under the direct and personal supervision of the duly licensed agent, and (3) within the scope of the agent's license: (i) In acceptance of applications personally underwritten by the agent; (ii) In acceptance of premium payments; (iii) In the performance of clerical duties; AND (iv) These activities CANNOT involve: (a) Interpretation of policy provisions or coverage (b) Sale of insurance (c) Underwriting (d) Signing policies (e) Verification of POLICIES

Illegal rebates or inducements (GS 58-33-90)

An agent that sells credit life cannot keep part of any funds the insurer gives the agent to pay claims.

Validity of premium payment to agent falsely representing an insurer (GS 58-33-100)

An agent who knowingly accepts premiums for a company that he or she is not authorized to accept premiums for is guilty of a MISDEMEANOR.

False representations in insurance applications (GS 58-33-105)

Any agent found guilty of willfully making any false or fraudulent statement or representation for the purpose of obtaining any: a. fee, b. commission, c. money, d. or benefit from any company is guilty of a misdemeanor.

Notice of Cancellation (GS 58-33-55)

If an insurer cancels an appointment, it shall notify the Department, in writing, within 30 days.

Referral of business to repair source (GS 58-33-76)

No insurer, agent, adjuster or appraiser shall recommend the use of a particular service or source for the repair of property damage without informing the claimant that they are under no obligation to use the recommended repair service

Twisting (GS 58-33-75)

No licensee (AGENT) shall make or issue any written or oral statement that misrepresents any policy of insurance for the purpose of inducing a policyholder in any way to terminate or surrender any policy of insurance.

adjuster

any individual who investigates or reports to his principal relative to claims arising under an insurance contract. You cannot hold an agents and adjusters license at the same time.

Discrimination forbidden (GS 58-33-80)

no agent shall discriminate in favor of any person