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Insurance Producer

What is an Insurance Producer?

An insurance producer is a professional who has the appropriate licensing to sell insurance policies. Insurance agents and insurance brokers are both types of insurance producers.

State law and insurance producers

While it might seem unnecessarily complicated to call insurance agents and brokers producers, the “producer” designation actually does mean something specific. It all comes down to the state laws that govern insurance sales.

Per the National Association of Insurance Commissioners’ (NAIC) Producer Licensing Model Act, individuals can’t sell or negotiate insurance contracts unless they hold a license in that line of authority from the appropriate state agency.

That means someone random off the street can’t just start acting as an insurance agent or broker. Instead, state law usually requires an indiviudal to take a certain number of pre-license education hours and pass an exam.

What’s more, they generally need to get licensed in the line of authority they want to sell. To become a life insurance agent, for example, the person will need to take course hours on life insurance and pass a life insurance exam. Only then can they be considered a life insurance producer and start selling life insurance policies.

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