Are you planning to become an insurance agent? If so, you need to learn how to earn your agent’s license and then keep it in force.
The insurance business is one of the most highly regulated industries in America. Agents, brokers, public adjusters, and others must comply with state or territorial insurance statutes. Insurers must also abide by those laws, Department of Labor (DOL) and Securities Exchange Commissions (SEC) regulations, and other federal rules. However, the legal and regulatory burden is hefty on agents and brokers. They have to fulfill requirements to enter the business, and they also must complete continuing education courses to keep their licenses in force.
Because there are 50 states and 5 U.S. territories with permanent residents, insurance regulations across the country are diverse. Some states adopt strict oversight, while others adopt a more lenient approach. For instance, when it comes to agent licensing, some jurisdictions require little formal study and no fingerprinting, while others mandate background checks and a large amount of pre-exam training (in terms of hours).
From Easy to Hard and Everything in Between
At the base level, many jurisdictions only require new agents to be 18 years of age or older and pass a licensing exam for each of their anticipated lines of business (also known as a line of authority). This situation applies in 13 states, including:
Required to be 18 and Pass Licensing Exam for Lines of Business:
- Delaware
- Kansas
- Maine
- Massachusetts
- Missouri
- New Hampshire
- North Dakota
- Oklahoma
- Rhode Island
- South Carolina
- South Dakota
- Vermont
- Virginia
However, don’t assume all of these states have the same requirements. Although none of them require fingerprinting, some require the submission of criminal-history reports from an agent’s domicile state(s) and the FBI and/or two forms of identification. Even so, becoming a licensed insurance agent in these places is a relatively simple process. You still must study for and pass a licensing exam, but you won’t need to complete a pre-exam course with a minimum number of state-mandated training hours.
The next level up - in terms of difficulty - are seven states that require fingerprinting but do not mandate a minimum number of hours of pre-exam training. Like the prior group, these states make you pass a licensing test. Check with each state’s insurance department website to determine license exam variations. For example, in Alaska, you don’t need a license to sell motor vehicle rental insurance. Some states also waive testing for non-resident agents who are licensed in good standing in another state. They may also waive testing if the agent had been licensed elsewhere and now is relocating to a state with plans to sell the same type of insurance. The seven states at this level of difficulty include:
Required to be 18 Pass, Pass a Licensing Exam for Lines of Business and Fingerprinting:
- Alaska
- Arizona
- Hawaii
- Idaho
- Montana
- Utah
- Wyoming
Required to be 18 Pass, Complete a Pre-Exam Training Course with a minimum number of study hours, Pass a Licensing Exam for Lines of Business and Fingerprinting:
- Alabama
- California
- Florida
- Georgia
- Louisiana
- Minnesota
- Nevada
- New Jersey
- New York
- North Carolina
- Ohio
- Oregon
- Pennsylvania
- Tennessee
- Texas
- Washington
- West Virginia
- Wisconsin
Did you notice Alabama has not been mentioned? It is the strictest state in the nation in terms of agent licensing. Its minimum licensing age is 19 (vs. 18 in other states), and it mandates fingerprinting and pre-exam training hours, along with passing a test.
Note: if you’re planning to become an insurance agent, your first step is to determine your state’s licensing requirements.
Enter Continuing Education Requirements
Once you fulfill your state’s initial licensing requirements, complete a pre-exam course (if required) and pass the actual licensing exam, you’ll be ready to apply for your state insurance licenses. Check your state insurance department website for the forms to use and for the licensing fee you must pay.
As a newly licensed producer, you must periodically renew your license. Before doing so, you’ll need to provide evidence that you fulfilled your state’s continuing education requirement. Since these vary by jurisdiction, be sure to check your insurance regulator’s website for details.
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