Licensing: purpose, license types, appointments, and requirements

Why Florida licenses insurance agents

Insurance is a promise that may not be tested for years, so the consumer usually cannot judge the product or the person selling it at the point of sale. Licensing exists to protect the public: before anyone may sell, solicit, or negotiate insurance, the state checks that the person is qualified, competent, and trustworthy, and it keeps the power to deny, suspend, or revoke that permission. In Florida, licenses are issued by the Department of Financial Services (the department). The department may refuse a license whenever grounds exist under s. 626.611 or s. 626.621, the chapter's discipline sections.

Two separate permissions: license and appointment

Florida draws a sharp line between two things:

• License -- issued by the department to the individual. It says what kinds of insurance the person is qualified to handle.
• Appointment -- the authority an authorized insurer gives the licensee to act on its behalf, filed of record with the department.

An agent may not transact, or even attempt to transact, any line of insurance unless an appointment by an authorized insurer for that line is currently in force of record with the department. A license with no appointment is permission to be appointed, not permission to sell. While a license is in force, an insurer may apply on the licensee's behalf for another appointment; once the department receives the application and the appointment taxes and fees, it may issue the added appointment without further investigation.

The main license types

• General lines agent -- all property, marine, casualty, and surety lines, and the license also covers health insurance. The one exception is bail bonds, which need a separate license under chapter 648. A general lines license is not issued limited to particular classes.
• Personal lines agent -- limited to property and casualty insurance sold to individuals and families for noncommercial purposes.
• Customer representative -- covers the same classes that the appointing general lines agent or agency is currently authorized to transact.
• Life agent -- all classes of life insurance (except a limited credit insurance license).
• Health agent -- all kinds of health insurance; it may not be limited to one class (except a limited travel insurance license).
• Limited licenses -- narrow categories such as travel insurance. Two older limited licenses are closed to new applicants: motor vehicle physical damage and mechanical breakdown (no new licenses since October 1, 2012) and industrial fire or burglary (no new licenses since July 1, 2019). Existing holders may renew, but a terminated, suspended, or revoked license of either kind cannot be reinstated.
• Surplus lines agent -- a licensed general lines agent who places business with surplus lines insurers.
• Nonresident agent -- a person licensed in a home state who is also licensed in Florida.

Special requirements worth knowing

Temporary license. The department may issue a nonrenewable temporary license of up to 6 months for a general lines, life, or personal lines agent. The applicant must be a natural person at least 18, and a U.S. citizen or a legal alien with work authorization. For general lines, it goes to an employee, family member, business associate, or personal representative of a licensed agent who has died or cannot work because of military service, illness, or disability, to continue or wind up the business. The temporary licensee may represent only the insurers the replaced agent last represented. Fees are not refunded once the license issues.

Transfer from another state. A person licensed in good standing elsewhere may transfer to Florida by becoming a Florida resident, having been licensed in the other state for at least 1 year immediately before moving, and filing a Florida application received within 90 days of becoming a resident. The application needs a home-state certification of good standing and fingerprints. Florida prelicensing education and the exam still apply unless an exemption or a substantially equivalent requirement covers them.

Nonresidents who move here. A nonresident must hold a home-state license the whole time. On becoming a Florida resident, the agent may keep working under the nonresident license for up to 90 days, but must become licensed as a resident within that time or the license and appointments are canceled immediately.

Surplus lines agent. Must already be a licensed general lines agent, with either 1 year working for a licensed surplus lines agent or 60 class hours in an approved surplus and excess lines course, and must pass a written surplus lines exam. A former surplus lines agent may be reappointed without a new exam if the application is filed within 48 months of the prior appointment ending. A temporary surplus lines license, for an agent who has died or is disabled, lasts no more than 4 months and cannot be renewed.

Exam tip: license = qualified; appointment = authorized to represent a specific insurer. You need both to transact.