Guide to Insurance Licensing for the Non-Insurance Business

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By The Boost Team on Jun 1, 2022

8 min read

If you’re new to the world of insurance, the process of getting an insurance license may seem time-consuming and even a little intimidating, but it’s surprisingly easy if you work with the right partner. In this blog, we’ll go over what an insurance license is, why it matters, how to attain the right licenses for your business, and how to get the help you need along the way.

What Is an Insurance License and Why Is It Important?

Embedded insurance is a great opportunity to increase your revenue, diversify your offerings, and deepen customer relationships. To reap the full benefits, however, it’s recommended that your company get licensed.

An insurance license is a certification given by individual states that allows an individual or entity to sell, solicit, or negotiate insurance in that particular state. Each state requires a unique license. So, if you wanted to sell insurance in more than one state, you would need to obtain a license for every state you intended to sell in.

If you or your company were to attempt to sell or market insurance without a license, it would be considered illegally selling insurance. You could be subject to large fines and legal repercussions from your state’s insurance regulatory agency (and the agency of any other state you illegally sold insurance in). This makes obtaining a license the crucial first step in the insurance selling process. The good news is, when you work with the right digital insurance partner to get the licenses you need, all of those issues can be easily avoided.

There are many different types of insurance licenses available, for different kinds of insurance (for example, selling cyber insurance requires a different kind of license than selling pet health insurance). For this blog, we’ll be discussing two licenses you need to become a distribution partner who sells and markets property & casualty insurance on behalf of a carrier: the Individual License and Entity License.

Individual and Entity Licenses

What is an Individual License in Insurance?

An Individual License– also referred to as a “Producer” or “Agent” License– is given to an individual after they complete a pre-licensing course and pass the required tests in their resident state, which is a state where an individual has a residence or primary place of business. The purpose of this license is to educate the holder on the ins and outs of the insurance process and ensure that before selling, soliciting, or negotiating insurance, they are informed and responsible.

What is an Entity License in Insurance?

Once someone in your company has attained their Individual License, your company can apply for its Entity License, also known as an “Agency” License. This license is given to the company itself and allows it to sell insurance within the resident state.

For your company to sell and market insurance products on behalf of carriers, you need both an Individual License holder and an Entity License.

Who at Your Company Should Be Licensed?

When determining who should become licensed on the entity's behalf, the individual should be someone who holds a position of substance and is likely to stay at the company long-term. That usually means someone at the executive level, such as an owner, partner, director, or officer. Once this person has obtained their license, they will be known as the Designated Responsible Licensed Producer (DRLP), sometimes referred to as a “principal agent.” The DRLP needs to be licensed in all jurisdictions that the entity sells in.

The DRLP is usually responsible for compliance oversight of the agents operating under them. Because the DRLP is typically held accountable for all entity actions, this kind of oversight is a requirement in most states. When selecting a candidate to become the entity’s DRLP, they should be informed and willing to take responsibility.

Some companies have more than one licensed person working for them, but only one is required to sell. If you lose your DRLP and there isn’t another licensed person at the company, then someone else will need to step in or be elevated to a suitable position to hold the title of DRLP. Otherwise, the entity can’t continue selling insurance.

How Do You Get an Individual Insurance License?

The Individual License should be obtained in your resident state. We’ve outlined the general steps to follow below, but every state has unique requirements. Make sure that you know the steps that apply to your state.

Step 1: Complete the pre-licensing education course (varies by state)

The first step is to complete a pre-licensing education course. These courses require a specific amount of study time, which varies based on state. Each state’s requirements can be found here. We recommend taking the Kaplan self-paced online pre-licensing course for your resident state.

Step 2: Pass the practice exam

Once you’ve completed the pre-licensing education course, you must pass your resident state’s practice exam to receive a certificate of completion and qualify for the state insurance licensing exam.

Step 3: Complete the state insurance licensing exam (varies by state)

Step 4: Apply for your Individual Insurance License in your resident state

After passing the licensing exam, submit the licensure application and pay all applicable fees in your resident state. This can be completed on the state's Department of Financial Services or the Department of Insurance website. In many states, you must also provide fingerprints or other background information. Once approved, the individual insurance license will be issued.

How Do You Apply for an Entity License?

Once your DRLP has obtained their Individual License, your company can begin the process of attaining its Entity License.

Step 1: Create Insurance Agency Entity

Your first step is to create a registered insurance agency entity. To do this, you must choose an entity name and submit it for approval to the state government where your agency will be based (this must be a state where you have a business presence). The state will issue the entity a Federal Employer Identification Number (FEIN) and the business entity will be officially registered. Once registered, the entity can start submitting the required licensure paperwork with the state.

Step 2: Apply for the Entity License in Resident State

Next, the entity needs to select its Designated Responsible Licensed Producer (DRLP), and file the DRLP’s approved Individual License along with its entity application to its resident state. Once approved, the entity will receive its resident state license.

How Do You Register for a Country-Wide License?

You and your company might want to sell or market insurance in more than just your resident state. Once the individual and entity are licensed in their resident states, each can begin applying for non-resident licenses in other states.

However, technically a “country-wide license” doesn’t exist. There isn’t one license that covers the whole country. Every state has a unique license and different requirements for its applications, so the process of getting licenses in multiple states can be extensive and complicated. Because the DRLP needs to be licensed in all jurisdictions that the entity sells in, the process involves filling out an application, gathering various supporting documentation, and submitting it individually to each state for both the individual and the entity.

To sell nationwide, you would need to do this process multiple times to be licensed in all 51 U.S. jurisdictions—the 50 states and Washington D.C. Luckily, there is some reciprocity amongst the states, which means that if you get licensed in one state, you do not need to satisfy all the requirements like taking a pre-licensing course or licensing exam in all other states to become licensed there.

Is It Beneficial to Work with a Licensing-as-a-Service Company?

While reciprocity helps reduce the amount of work that is required to apply for individual and entity licenses in all 51 U.S. jurisdictions, that is still a lot of applications. If you choose to do these processes yourself, it can take a very long time, especially if you are unfamiliar with each state’s requirements. There are processing and wait times, and often you can go back and forth with each state because of missing or incorrect information, which can greatly increase your get-to-market time.

In addition to the application process, there are also unique renewal processes for each state —some are annual, some are every four years. Most states also require that individual license holders complete a certain number of hours of continuing education every renewal period, and the exact number of hours varies by state.

To mitigate such a lengthy and complicated process, third parties exist that offer licensing-as-a-service. When you work with a licensing-as-a-service company, you give your information to the company and then they handle the lifecycle of your licenses from applications to ongoing renewals.

Licensing-as-a-Service with Boost

Not all licensing-as-a-service companies are created equal. Some third parties can actually extend the process by not being clear about what information is required upfront. Ultimately, they can make the process more expensive, cumbersome, and time-consuming, delaying your go-to-market time and defeating their purpose altogether.

When you work with Boost Insurance, on the other hand, we have the experience and expertise to streamline these processes. In addition, it is our goal to get you to market as quickly as possible - that’s the Boost difference. Our in-house licensing experts will collect all your necessary information upfront, process it, and then submit the applications for you, country-wide, saving you a lot of stress and back and forth. Our licensing team knows all of the pitfalls and loopholes in each state. They also know what questions to ask ahead of time, so they can submit licenses and gain approvals quickly. We can get you to market, in as many markets as possible, selling Boost insurance products on our platform in as little as a month.

We will also handle the lifecycle of your licenses, keeping track of your renewals and updating you along the way. And, when you work with Boost, your licenses are not exclusive to Boost products. You can use your licenses for other insurance products as you choose.

If you want to learn more about getting your individual or entity insurance licenses through Boost’s licensing-as-a-service, contact us.

Disclaimer: The information set forth herein is intended for informational purposes only and may include links to internet websites maintained by third parties. Boost Insurance Agency, Inc. (“Boost”) assumes no responsibility or liability for any errors or omissions in the content of such third-party websites. Any timelines or requirements included herein are illustrative based on experience and subject to change. Boost cannot guarantee any state review timing.

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Offering Insurance: Build, Partner, or White-Label?

Nov 1, 2021

So you’ve heard that the insurance market is set to pass $700B gross written premiums this year and that changing consumer expectations are creating big opportunities for companies that haven’t traditionally offered insurance. Now what? If you’re ready to get started with offering insurance, your options fall into three general buckets: build and sell the insurance product yourself from scratch, partner with an insurance company to offer their product, or work with an insurance-as-a-service provider to offer white-label insurance products. So, which is right for your business? We’ll go through what’s involved with the top 3 options, as well as some pros and cons to be aware of. Your first option for offering insurance to your customers is also the most intensive: you can create the insurance products you want to offer, in-house. With this option, you would essentially create a business within a business: an insurance agency that operates as part of your company. As with most business-DIY options, the big advantage of building your own is that you can create exactly what you want. You’ll be responsible for the concept, design, operations, compliance, and tech, so you can approach each area in a way that centers your business needs. Building a new business from scratch is never easy, but insurance is a particularly difficult vertical to get into. It’s complex and heavily regulated, and getting started requires a significant investment of time and money. How significant? Here’s a quick overview of the steps you’d need to follow to create your own insurance products and offer them on your website. All in all, you’re looking at a multi-year timeline to build your insurance products in-house from scratch, with a considerable financial investment as well. And that’s not even considering the ongoing financial investment to maintain them - long-term program management requires significant resources. Besides just the effort involved, the long lead time for getting an insurance product to market means that by the time you get there, the market may well have changed. On top of time concerns, there’s another disadvantage you should weigh before going the build route. Everything we just covered about starting your own insurance program probably falls outside your company’s core business and specialization. What’s more, recruiting and hiring the right people to manage it may be significantly more challenging than hiring the right people for your core business. It’s often difficult to know what to look for when hiring for a completely different skill set, outside your core industry. Once you’ve brought all these new people on board, you’ll also have to manage them in an area where your core leadership has little experience. Consider whether the benefits of building it yourself outweigh the inevitable distraction of running an entirely separate secondary business within your company. Instead of creating an insurance product yourself, you might choose to partner with an established insurance company to offer your customers their product. In this scenario, you would have a link on your site for the customer to buy insurance. When the customer clicks it, they would be taken to the insurance partner’s website to buy the product from them. This is sometimes called affinity marketing, or click-through affinity. In this situation, you would be essentially acting as lead gen for your insurance partner. Your partner may pay you a certain amount per click, but after that you would not participate in the transaction. Your insurance partner would complete the transaction, collect the premiums, and own the insurance relationship with the customer. A click-through insurance partnership like this is both fast and simple to set up. After you’ve worked out the details of the partnership agreement, all you’ll need to do is add the link on your website to direct customers to the insurer. A partnership like this is also relatively low-commitment. Because you’re simply passing web traffic on to the insurer, you can later switch insurance partners or even remove the insurance option from your site altogether with a minimum of disruption to your business. The easy setup of a click-through affinity partnership also comes with considerable drawbacks. Because you’re just providing a link to your partner’s signup form, you lose control of the customer immediately after they click the link. Whatever comes after that is up to your insurance partner. If the customer has a negative experience during the process, it might reflect badly on your brand for offering the referral. Even if the experience is a good one, losing control of the customer comes with another big downside: you also lose control of the revenue. The insurance customer relationship will be with your partner, and they’ll collect the premiums. While a click-through partnership is a fast and straightforward way to connect your customers with insurance, it also removes one of the major benefits of offering insurance on your site in the first place. With this option, you won’t see the kind of regular recurring revenue that you would if your company were able to collect the premiums. Further underlining that it’s not your product (or your customer), with this kind of partnership you’ll have little to no input into the insurance product you’re offering. Your insurance partner will build, develop, and sell the products that best fit their business interests, which may or may not be a good fit for your particular customers. As just another marketing partner, you won’t have much influence to try and get a product created that closely matches what your customers need from insurance. A relatively new third option is to work with a company that offers insurance-as-a-service, and white-label the insurance product they provide you with. If you aren’t familiar with insurance-as-a-service, it generally works like this: insurance-as-a-service providers are companies who have already done the work we outlined in Option 1 (Boost is one example). They’ll have all the necessary state licenses to create their own insurance products, and they will have already negotiated with licensed carriers to back those products. A good insurance-as-a-service provider will also already have built the necessary technology to offer an embedded insurance product experience. Your company can then sign on with the provider to offer one or more of the insurance products they’ve created, under your own brand name, on your company’s website or app. Unlike affinity partnerships, partnering with a white-label insurance-as-a-service provider doesn’t simply generate customers for someone else. Your company will be the one selling the insurance product, on your own website. The customer will buy the policy from you, and you’ll be the one to collect the premiums and own the ongoing customer relationship. White-labeling an insurance-as-a-service product offers many of the advantages of building it yourself, but at a fraction of the time and cost. Because your partner will have already done the heavy lifting on things like operations, technology, compliance, and capital, you can easily offer the right insurance products for your customers - and get to market in a dramatically shorter timeline versus trying to create an insurance company from scratch. A white-label insurance product also allows you to reap the full business benefits of offering your customers insurance: While white-labeling an insurance-as-a-service product is much faster and easier than building one yourself, it’s still more involved than simply adding a link to your website. Working with an insurance-as-a-service provider may take longer to implement than partnering with an insurer for click-through affinity since you will be building the full experience into your website rather than just linking out to an insurance partner's website. Selling white-label insurance policies also requires an important additional step: someone at your company will need to be licensed as an individual broker, and then sponsor a license for your company. You may recall this as Step 1 in the build process - the broker license is required to legally sell insurance, which your company will do with its insurance-as-a-service products. This sounds much more intimidating than it actually is. The insurance licensing process itself is relatively simple and straightforward. However, it does require additional effort from one of your employees (usually a senior executive who is unlikely to leave the company). The other good news is that not only is the licensing process easier than it sounds, but once it’s done, it’s done. You’ll need to maintain it with fees, renewals, etc, but you won’t need to go through the process again as long as that employee is still at the company. A good insurance-as-a-service partner will also help you with this step, so you can check the box and start offering insurance to your customers as soon as possible. The insurance market is changing quickly, and there’s never been a better time for new entrants to take advantage of the embedded insurance opportunity. Depending on the route you take to get there, however, the cost, time to market, and experience for your customers can vary a great deal. When starting on the road to offering insurance, it pays to carefully consider your budget, your timeframe, and your business goals, so that you can choose the option that’s right for your company. Is insurance-as-a-service the right option for you? Boost can help get you started. Contact us today to learn more about your options for offering the different ways to offer insurance with one of our Boost product experts.

The top 3 takeaways from our embedded insurance consumer survey

Embedded Insurance Survey Results: What We Learned From Consumers

Feb 3, 2023

You may have heard that embedded insurance is a big opportunity to grow your business, but are your customers actually interested? We wanted to get the story straight from the source, and so in Q4 2022 Boost surveyed 650+ US consumers. We asked about their experiences with insurance, how they felt about their current insurance options, and what mattered most in their insurance purchases. Here are the top 3 things that we learned from our consumer insurance survey results. [See Full Size] In our insurance survey, a whopping 73% of consumers had either already bought insurance from a non-insurance brand, or would be interested in doing so. While price was mentioned most often, other reasons included brand loyalty and convenience. Trust was another important factor. 62% of respondents were interested in buying financial products from a trusted brand, rather than a bank. For millennials, the number went up to 95%. First movers might have an advantage here as well. 20% of our respondents had never been offered financial products from a retail brand - but they liked the idea. All this is promising news for companies outside the traditional insurance sphere who are looking to build revenue and customer loyalty with embedded insurance. If you can deliver the product and experience consumers are looking for, the appetite is there. It’s hardly a secret that convenience is crucial to customer experience in the digital age, so it comes as no surprise that it was important to our respondents. 59% told us that they’d be more likely to buy insurance if it were offered digitally, as part of a related transaction. Younger consumers were more likely to be enthusiastic about digital insurance: nearly 70% of respondents aged 18-29 were interested in buying insurance directly through a transaction on a retail website. For half of our respondents, embedded insurance wasn’t a novel idea. 50% had already bought embedded insurance at least once, at the point of sale in a related transaction. For many consumers, insurance is a long-term purchase. 68% of our survey respondents told us they’d had the same insurance provider for at least two years, and 10% had had the same provider for more than five years. For retailers, insurance could also be an overall boost to retention. 62% of respondents said that when a retailer offered protect-your-purchase options, they were more likely to be repeat customers. Learn more about offering embedded insurance in our free guide, or contact us to get started.

How to Market & Sell Pet Insurance

Mar 11, 2022

Offering embedded pet insurance is a great way for companies that already serve pet owners to bring in an ongoing source of revenue. But just like every other product out there, marketing and advertising are key contributors to your overall sales. If you’re new to the industry, here are six pet insurance marketing tips to keep in mind when selling pet insurance. Because pet insurance is still relatively new in the US, some of your customers may not even be aware that it’s an option. So how do you convert them? From industry experience, we know that customers are most likely to sign up for insurance when it’s offered as a complement to their existing pet purchase. If you can make them this offer at the point of sale as an add-on to what they’re already buying, you are much more likely to win that additional revenue (and turn a one-time customer into an ongoing one). Your existing relationship with your customers can help you make the right insurance offer at the right time. From their purchase records, you probably already know what kind of pet(s) your customer has, and how much they tend to spend on pet expenses. Leverage that data in your pet insurance marketing strategy. A customer who regularly buys vitamins and specialty food for their pet might be interested in a wellness package. A customer with several pets might be interested in a multi-pet discount offer. Additionally, you likely have a database of prospects that you’ve identified as your target audience, but who haven’t purchased with you yet. Since you’re already actively marketing to this group, you can add your pet insurance offer into the mix and the additional value may help nudge them over the conversion line. Insurance is complicated, and sometimes consumers miss out on the coverages they need because the details are confusing or buried in legalese. As a trusted source for information about their pet, your brand is in a great position to break it down for them. In your pet insurance marketing, offer detailed explanations of how your pet insurance works, and what is or isn’t included, in clear, natural language that your customers can easily understand. Avoid confusing your customers with jargon or complicated legal statements, and don’t try to hide details in small print. Everything in your pet insurance advertising should be understandable by the average consumer, and any information about what is or is not included needs to be easily visible. One of the most powerful sales tools you can get is a real-life story about how your customer’s pet insurance made a difference for them. Consider reaching out to insurance customers who save on big bills, and see if they’d be willing to share their stories so you can leverage these in your pet insurance marketing. When sharing testimonials for insurance, there are a few things to keep in mind: This sounds like a marketing no-brainer, but this is particularly important for insurance advertising. If a state insurance commissioner finds your ads to be misleading or deceptive, you could be hit with fines and other enforcement actions, so it is always advised to be transparent when selling white-label pet insurance. If you use any statistics in your insurance ads, you’ll need to cite where that information came from. It pays to go the extra mile for good, credible sources - a great statistic isn’t so great if you have to attribute it to “koolstats4u.biz” in your ad. It’s a good idea to make sure that nothing related to insurance goes live without first passing a compliance review. If you use external marketing agencies for things like paid search ads, set up a review process to ensure that all insurance-related copy is vetted by your team before going live, including for A/B tests and similar experiments. If your company offers pet-related products or services, selling pet insurance is a great option and it is so easy to do with Boost. If you’re just getting started with pet health insurance, our team is here to help. Get in touch with us today.