Don’t Forget Your Compliance Needs!
Insurance agencies and their producers are busy, which is a good thing because it means they’re hard at work serving customers. Sometimes, though, being busy can lead to overlooking important deadlines, such as insurance license renewals. These are important requirements, and state insurance regulators do not take them lightly. We’ve compiled a list of some common compliance myths—along with the facts.
Myth: Insurance producers can continue to write business on a lapsed license, as long as they apply for a late renewal.
Fact: Not all states allow late renewal of insurance licenses, and states that do have limited grace periods—some no more than a few days. License renewal is not guaranteed, and an administrative action is likely if a producer does business without a license. The most prudent course of action in the event a license is allowed to lapse is to avoid writing any new business or servicing existing business until the license is renewed. Prompt renewal of all applicable licenses is the best approach so there is no lapse in serving agency customers’ needs.
Myth: One state didn’t care that I renewed my license late, so other states will probably treat a late renewal the same way.
Fact: States have different approaches when it comes to insurance regulation. Grace periods on license renewals are not offered by every state, and those that do vary on how much time they are willing to allow. Compliance is complicated because of state-by-state differences. It’s not safe to assume that just because one state is lenient, others will be too.
Myth: If the license renewal application is missing a few details, it’s no big deal.
Fact: Incomplete or misleading information in a license application is a reason for states to deny, revoke, or non-renew a license. Intentional misrepresentation and fraud are obviously crossing a line, but forgetting to include material information is still problematic. Ensuring license applications are complete and accurate is worth the time and effort, and it’s essential for producers to continue to do business.
ReSource Pro Can Help
ReSource Pro can help agencies and producers get all the facts on compliance and secure all the licenses they might need for all major lines of authority: property and casualty; life, accident, and health; surplus or excess lines; variable life and variable annuities; personal lines; and surety. To learn more about how ReSource Pro and ILSA, a ReSource Pro company, can help your agency with compliance, visit the ILSA website.