In order to open an independent insurance agency, you need to be aware of the following facts:
1) Practicing agents or brokers need to have a valid insurance license for the state.
2) Insurance agents need to have a clean criminal history and have passed a state-administered exam.
3) The owners of the insurance agency must be atleast 18 years of age.
4) If there are any criminal charges, it must be explained in a letter to the insurance commissioner and written consent must be obtained from authorities.
5) An independent agency can be opened with 1 agent or broker who can serve all clients.
6) The regulations and compliance matters varies from state to state.
7) An insurance agency is a way to build business with residual income sources.
Steps of setting up an independent insurance agency:
1) Firstly you need to identify which type of insurance company you will offer i.e. whether you will specialize in certain types of policies or offer related types of insurance e.g. auto and home insurance sold under one roof, life and health under another.
2) Prepare a checklist for a “resident business entity”and “nonresident business entity” from the state commissioner’s office or visit its website.
3) Obtain a complete list of insurance commissioners with contact information at the National Association of Insurance Commissioners’ website.
4) Complete the procedures of state forms required to start the insurance agency i.e. certificate of coverage for limited liability companies, appointment of a licensed producer and resident business entity application.
5) Pay the required application fees and review your state’s fee schedule on the insurance commissioner’s website.
6) Obtain all required business permits and licenses from your state business tax boards.
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