14. An agreement allowing a resident of one state to acquire an insurance license in another state without taking an examination is known as
Answer: D
A reciprocal agreement.
A reciprocal agreement allows a resident of one state to acquire an insurance license in another state without the need to take an examination, facilitating easier mobility for insurance professionals across state lines.
A) an alien agreement.
An alien agreement refers to a situation involving foreign insurance companies operating in a domestic market, not to the licensing of residents between states. Therefore, this option does not pertain to the context of acquiring an insurance license across state lines.
B) an interstate agreement.
While this term suggests a relationship between states, it does not specifically indicate the provision allowing for the acquisition of a license without examination. An interstate agreement might cover broader aspects of cooperation between states but does not define the licensing process in the way a reciprocal agreement does.
C) a ceding agreement.
A ceding agreement is related to reinsurance, where one insurer transfers part of its risk to another insurer. This term is unrelated to the licensing of insurance agents or the ability to practice in different states, making it an incorrect option.
D) a reciprocal agreement.
This option correctly identifies the specific agreement that allows residents to obtain insurance licenses in other states without additional examinations. It is the precise term used in the context of licensing reciprocity between states.
Conclusion
The correct answer, a reciprocal agreement, accurately describes the mechanism that facilitates insurance professionals obtaining licenses in different states without further examinations. All other options fail to address this specific licensing process, either relating to different concepts or lacking the necessary specificity regarding state-to-state licensing agreements.