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

Lines of authority

Questions

  1. OK, so some license types have changed. Will there be any changes to the lines of authority offered on the producer license?
  2. If someone had the vehicle LOA, what happens on July 1?
  3. What happens with the marine LOA?
  4. What happens to a credit life, credit disability or credit casualty license?
  5. With this change for limited line credit, is a licensee with one of the former credit line licenses required to do anything to get the new license?
  6. How do I get a variable LOA?
  7. Has anything else changed for LOAs for the insurance company?
  8. You said earlier that limited appointments and the general agent licenses are being eliminated. How will that work?


Answers

1. OK, so some license types have changed. Will there be any changes to the lines of authority offered on the producer license?

Yes. These lines of authority (commonly referred to as LOA) will change:

  • Personal lines and variable lines have been added.
  • Vehicle and marine lines have been eliminated.
  • The credit life, credit disability and credit casualty limited licenses have been condensed into one: limited line credit. (back to top)

 

2. If someone had the vehicle LOA, what happens on July 1?

The agent license will convert to a producer and the vehicle LOA will be converted to personal lines. This change will mean that a resident personal lines producer must complete continuing education (CE) credits, which were not required with the vehicle LOA. This is particularly important for producers who renew their licenses after July 1.

Example: Your license renews on July 10, 2009 and you received your renewal notice in May.  If you renew before July 1, you will pay the old fee and will not be required to complete CE to renew. The renewed license will convert on July 1 to a producer license with the personal lines LOA.

 

Please note:  if you wait until AFTER July 1 to renew, you must complete CE before the renewal can be completed. (back to top)


3. What happens with the marine LOA?

It will be eliminated and will be converted to a property and casualty LOA. (back to top)

 

4. What happens to a credit life, credit disability or credit casualty license?

These will all be rolled into the new limited line credit.

The new definition of "Limited line credit insurance" includes credit life, credit disability, credit property, credit unemployment, involuntary unemployment, mortgage life, mortgage guaranty, mortgage disability, automobile dealer gap insurance, and any other form of insurance offered in connection with an extension of credit that is limited to partially or wholly extinguishing the credit obligation that the Commissioner determines should be designated a form of limited line credit insurance. (back to top)

 

5. With this change for limited line credit, is a licensee with one of the former credit line licenses required to do anything to get the new license?

No - and there is no additional testing or CEs required to maintain the license. Your license will now be expanded so you can write any type of insurance listed in the limited line credit definition. (back to top)

 

6. How do I get a variable LOA?

It depends on whether you have a license already or want a new one. Either way, you must have a securities license from Department of Financial Institutions (DFI).

If you are already licensed to sell the variable product line, you may add variable to your license using our Online services after July 2.

If you are new to selling variable products and you are a resident, you must pass the Washington life insurance exam, the Washington securities exam, apply for a resident license with the life and variable lines, and supply your securities license number.

If you are new to selling variable products and you are a non-resident, you would apply for a variable line license (we will verify that your home state offers variable and that you have this line on your existing resident license) and include your securities license number. Once the license is issued, you must obtain a Washington securities license through the Department of Financial Institutions (DFI).  We will not require the underlying life license as we do for the resident licensee, but the non-resident must understand that they may ONLY sell variable products.  They may not sell non-variable products without being properly licensed. (back to top)

 

7. Has anything else changed for LOAs for the insurance company?

Yes, a big change will be in company appointments. Under the old model, the lines of the agent needed to match the lines of the appointing company exactly.

Example: Prior to July 1, you have a life-only license.  You cannot be appointed to a life and disability company.

As of July 1, you will only have to match one line of authority for the appointing company.

Example: After July 1, you have a license with property and casualty lines. You may be appointed to a company with life, disability, property and casualty lines. (back to top)

 

8. You said earlier that limited appointments and the general agent licenses are being eliminated. How will that work?

It depends on the converted licensees and the appointing companies.

The general agent license will change to producer, as will the licensees under the general agent. The limited appointments are eliminated.

If the producer (the former general agent licensee) wants to form a business entity (such as an agency), the licensees who previously held the limited appointments can be affiliated to the new agency.

If the former general agent does not wish to create a new business entity, the former limited appointees may obtain a full appointment from the insurance company. If the company is not willing to offer a full appointment, the producer has two options:

    1. Act as a broker (requires you to have a bond and to file disclosure statements); or
    2. Place business on a referral basis through another properly appointed producer. (back to top)


Questions?

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


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