Insurance ConsultantsLicense Renewal
Any individual or agency who charges a fee to advise in Life and Health or Property and Casualty insurance is required to be licensed as an insurance consultant.
The only exemptions are:
- A licensed attorney acting in in his/her professional capacity,
- A trust officer of a bank acting in the normal course of his/her employment,
- An actuary or certified public accountant who consults during the normal course of his/her business,
- Any person employed as a risk manager and who consults for his/her employer only, and
- An insurance producer acting in his/her professional capacity who advises and receives a commission only.
Nonresident applicants must be licensed or otherwise authorized as an insurance consultant in their home state or province.
If a nonresident applicant’s home state does not issue insurance consultant licenses, then the nonresident applicant must hold a Life and Health and/or Property and Casualty license in their home state to qualify for a corresponding Consultant license. The Bureau will verify nonresident licensing through the NAIC’s Producer Database.
An insurance consultant must enter into a written contract with the client prior to engaging in any consultant activity. The contract must include, without limitation, the amount and basis of any consulting fee and the duration of employment.
If the insurance consultant receives commission for selling, soliciting, or negotiating insurance as a part of his/her services in addition to a consulting fee, such information must also be disclosed in the contract.
Rebating by an insurance consultant is prohibited and could be grounds for refusal, suspension, or revocation of an insurance consultant's license as well as monetary penalties of up to $5,000 for each violation.
A consultant's license is required if the financial planner’s recommendation of a specific insurance option or plan is part of the proposal.
If commission is received from the sale of an insurance product, directly or indirectly, then the financial planner must also be licensed as an insurance agent.
NOTE: If securities are part of the proposal, the financial planner must also contact the State Corporation Commission’s Division of Securities and Retail Franchising at 804-371-9051 for additional registration requirements.