Question 93

An individual selling a policy for commission is REQUIRED to be licensed as an insurance producer.

Selling insurance policies for commission necessitates licensure as an insurance producer, as it involves soliciting and negotiating insurance contracts on behalf of clients.

A) An underwriter at an insurer.

An underwriter typically assesses risks and determines policy terms but does not engage in selling insurance directly to consumers. Therefore, underwriters do not require a producer license as their role does not involve the solicitation or negotiation of policies.

B) An officer or director of a licensed insurer.

While officers and directors play significant roles in the management of licensed insurers, they are not required to obtain a producer license unless they are involved in selling insurance. Their responsibilities often focus on oversight and governance rather than direct sales activities.

C) An administrator of a group plan.

Administrators of group plans manage the operations and administration of insurance policies for groups but do not typically engage in selling insurance directly. Consequently, they do not need a producer license unless they are involved in the sales process.

D) An individual selling a policy for commission.

This option is correct because individuals who sell insurance policies for a commission must be licensed as insurance producers. Licensing ensures that these individuals have the necessary knowledge and adhere to regulatory standards in their sales practices.

Conclusion

The requirement for licensing as an insurance producer is specifically tied to the act of selling insurance for commission, which is essential for consumer protection and industry regulation. Options A, B, and C do not entail direct selling, which is why they do not require licensure, making D the only correct choice in this context.