By Mary Byrnes, AAI-M,
AU, Director of Education
We are asked pretty frequently, “Why does my Agent’s License show as inactive?”
An Agent’s License (PC or LA) is all about the relationship between the insurance company and the licensee. The Agent’s license is only good for that relationship. If someone has either a PC or an LA license that’s showing as ‘inactive,” it’s because there isn’t a direct relationship (company appointment) which is required between the licensee and the insurance carrier. When the agent’s license is issued, if there isn’t an insurance company appointment filed, the agent’s license goes into “inactive” status. The NYS DFS allows one renewal of an “inactive” agent’s license. After that first renewal, it will expire on the next renewal date.
Why is it so common to see “inactive” agent’s licenses? One reason is that the licensee who previously worked for a direct writer might have joined your staff, and those direct writing agencies will only allow their staff to have an agent’s license, since they only represent 1 carrier, and they have an insurance company appointment. The agent’s license follows the relationship between the carrier and the licensee, it doesn’t follow the person licensed.
It also seems to be a misconception that if you work for an agency you’d need an agent’s license. Not so! An agent’s license is only needed is if the licensee has an insurance company appointment. That’s not to say that it never happens that an individual does have an insurance company appointment, but it’s more common for insurance company appointments to be under the agency name.
So if you have an “inactive” agent’s license, you should weigh whether you really do need an agent’s license or if you need a broker’s license that follows the person and doesn’t require an insurance company appointment. Only you can know.
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