Washington State Office of the Insurance Commissioner

New producer rules - frequently asked questions

Categories

Producer Licensing | Lines of Authority | New Licensees |
Compensation and Disclosure | Miscellaneous

Miscellaneous

Questions

  1. How does this conversion affect how an agent or broker does business?
  2. Have the bonds for surplus lines brokers changed?
  3. Has anything changed for business entities?
  4. What happens if the existing business entity does not name a DRLP or the DRLP loses their license?

 

Answers

1. How does this conversion affect how an agent or broker does business?

For the agent converted to producer, not much will really change, other than what’s already been discussed.

  • Any producer charging a fee to a policyholder (and is dealing directly with the policy holder) must furnish the required written compensation disclosure to the insured prior to the sale of the policy.

For those who are agents and brokers, or simply brokers, a few things change:

  • They will have to declare the capacity under which they will be operating:  as an agent, as a broker, or as both. For new licensees, this declaration can be done on the online application.
  • If the producer intends to place business with an insurer that the producer does not have an appointment with (acting as a broker), they will need to obtain a bond prior to placing business. For new applicants, the bonding requirement is no longer a pre-requisite to issuance of a producer license. (back to top)

 

2. Have the bonds for surplus lines brokers changed?

Yes. Beginning July 1, bonds are a post-licensure requirement and bonds will no longer be kept by our office.  They will be audited instead.

Operating as a surplus lines broker without having the proper bonds in place will also result in fines and penalties to the full extent of the law. (back to top)


 

3. Has anything changed for business entities?

Yes. Each business entity must identify its “Designated Responsible Licensed Person (DRLP).”  This will be a licensed producer who is responsible for the business entity’s compliance with the laws and rules of Washington.

New entities will submit this information with their initial applications.

         

Existing entities will provide the information when they renew their licenses. (back to top)


 

4. What happens if the existing business entity does not name a DRLP or the DRLP loses their license?

If the existing business entity does not name a DRLP, they will not be able to renew their licenses.

If at any point the DLRP loses his or her license, the entity will be required to name another. (back to top)



Questions?

Phone: 360-725-7144
Email: Licinfo@oic.wa.go


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