Reminder of Guidelines for Licensed Agent and Administrative Staff Activities
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Technological innovations and new fulfillment type models provide significant assistance to producers and free them up to concentrate on selling life insurance. While these methods are helpful, there are also certain activities that only a licensed agent can perform, which cannot be delegated to any unlicensed personnel.
As a reminder, we have provided below important guidelines that you must follow if you are operating in, or anticipate operating in, a fulfillment type of environment.
Acts of an Agent
Although the different state jurisdictions define the acts of an agent somewhat differently, all states would consider solicitation, negotiation and effectuation of insurance products as activities that require an agent license and appointment, where required. These activities may take the form of face-to face contact, telephone contact or correspondence such as e-mail or faxes. State licensing requirements also do not define these activities with much specificity. These activities are instead generally described as follows:
Soliciting – Any activity that seeks or attempts to ask, persuade or urge an individual to purchase an insurance policy/contract or features.
Negotiating – Conferring with or offering advice to a customer, or any other action, which brings about an understanding or agreement to a transaction that is designed to settle or arrive at a resolution of the terms or features of a policy/contract.
Effecting – Any action designed to complete, bring about, put into effect, bind, eliminate or cancel a policy/contract of insurance or additional insurance coverage.
The following activities absolutely require a license:
• Explaining, interpreting or recommending coverage limits, benefits or payments.
• Effecting temporary life insurance with a Temporary Insurance Application and Agreement.
• Making sales involving replacements of existing coverage.
Acts Exempt from Licensing Requirements
Although the requirements vary by state, general categories of activities that do not require licensing could be described as follows:
• Acts that are administrative or clerical.
• Acts that are only indirectly related to the sale of the product.
• Acts for which no commissions are payable.
Please remember that state laws may differ from these general guidelines, and you should consider specific bulletins or regulations in your state.
Current Processing Environment
As mentioned before, the industry is changing, and producers are confronted with a broad array of services that will help them fulfill the application process. The Genworth Financial companies want to remind you, however, that you should always keep licensing requirements in mind when relying on such services. The questions that you should ask are:
• What tasks are being performed on my behalf?
• Do these tasks require licensing?
• Are the people performing these tasks licensed?
Our goal is the same as yours and your producers – to issue policies for new business in accordance with the regulations of the state. As usual, we rely on you to comply with state licensing requirements when soliciting, negotiating and effecting insurance. If you have a fulfillment center or are considering implementing a fulfillment-processing model, please ensure that functions requiring a license (as defined in “acts of an agent” above) are only completed by staff or agents who hold a valid license (and appointment where required) in the appropriate jurisdictions.