Dealing with a Lapsed License

Stefanie is Team Lead at ReSource Pro Compliance

Douglas Adams put it best, “I love deadlines. I like the whooshing sound they make as they fly by.” If your license renewal deadline has whooshed by—whether accidentally or intentionally (you thought you wouldn’t need the license anymore)—and now you need that license active again, here’s what to do.

Many states offer a “grace period” for late renewals, ranging from 15 days for non-resident producers in Georgia to 5 years for all producers in Louisiana. One year is the most common window. Availability of this grace period varies from state to state and is influenced by whether you are a resident or non-resident and by the type of license you hold. Late renewals typically incur extra fees, which can be substantial. Additionally, late renewals frequently cannot be submitted electronically, which slows the reinstatement process further.

When It’s Too Late to Renew

If a state does not allow late renewal, or if the grace period has expired, you must reapply for the license. Again, re-licensing fees may be higher. If it has been more than a year since you took your license exam (for residents) or had your fingerprints taken (if required), you may have to do this again before the license re-application can be submitted.

One producer I worked with was dismayed to learn that he would not be able to re-apply for his Arizona license until a full year expired from the date his license lapsed. This is unusual, but it reinforces why it’s essential to keep your renewals up to date.

Some states also require a written disclosure of whether any business has been conducted during the time the license lapsed. If business has been solicited, negotiated, or contracted under a lapsed license, it can result in fines or administrative actions.

Some Final Thoughts

Two more things to keep in mind about lapsed licenses:

When your resident license lapses, your non-resident licenses can also be cancelled. Increased use of shared databases, such as the National Insurance Producer Registry (NIPR), means non-resident states are finding lapsed resident licenses faster and sending out warnings. Don’t rely on this, however.

If the individual license for an agency’s Designated Responsible Licensed Producer (DRLP) lapses, it puts the agency’s license at jeopardy. 

Find out how ReSource Pro helps insurance agencies and producers meet their licensing and compliance needs by visiting our compliance page.