February 15, 2020
Insurance agents play a vital role in providing the public with a variety of insurance products and services essential to our everyday life. As such, it’s only fitting that all states require insurance agents to be licensed before entrusting them with the public – and with licensing requirements varying by state, there’s a lot to learn. With that in mind, there are a number of insurance agents looking to expand their footprint into other territories, but is it even possible for insurance agents to sell insurance products across multiple states?
You Can… But It’s a Process
To summarize, yes. Insurance agents can sell insurance products in multiple states as long as: a) they are licensed in the state(s) in which they plan to sell their insurance products; and b) the products are made available for sale in the state in which the agent plans to sell them. That said, there is no single license that would allow agents to sell insurance products in all 50 states. For that reason, insurance agents looking to sell insurance out of their state would need to obtain a “non-resident insurance license” in each state in which they plan to sell insurance products.1
Each state has its own set of procedures and processes for agents looking to apply for a non-resident insurance license, with the process varying by state and type of insurance.1 In other words, if an agent wanted to sell life insurance products and health insurance products in a different state, they would need to be licensed in that state twice – once as a life insurance agent, and once as a health insurance agent.2 At the end of the day, what an insurance agent sells doesn’t matter so long as they are licensed to sell their products and remain compliant with varying state regulations.
In addition to agents needing to be licensed in each state in which they plan to sell insurance products, and the need for agents to be licensed for each type of product they plan to sell in each state (e.g. life insurance, health insurance, homeowner’s insurance, etc.), the licensing requirement would differ by state. That is to say, some states like Colorado don’t require fingerprinting as part of the licensing process, while other states like California do.2 In addition, some states don’t require pre-exam training, like Arizona, where others like Florida may require up to 200 hours of pre-exam training based on the type of insurance you plan to sell.2
Some states may have certain products they aren’t allowed to sell under their own unique set of state regulations, meaning that agents may encounter a situation where the type of insurance product they offer isn’t available in the state they wish to sell products in.3 This obstacle can be particularly harrowing for agents who fail to do their research before getting licensed in another state, as it may force agents to reinvent their entire portfolio, sales approach, and pitch.
While it is possible for insurance agents to sell insurance products in multiple states, it’s essential that agents weigh their options and do their research before taking it upon themselves to start selling insurance products across state lines. As we discovered, the process can be cumbersome, extensive, obstacle-ridden, and difficult – and some agents may find the venture less appealing depending on the state licensing requirements. To ensure you make the most educated decision on your possible expansion, do your research, weigh your options, and move forward with confidence.
- America’s Professor, Live in One State and Want to Sell Insurance in Another? What You Need to Know about Non-Resident Insurance Licenses, 2019
- Findlaw, Insurance Agent License Requirements by State, 2020
- NAIC, State Insurance Regulation: History, Purpose and Structure, n.d.