Fulfillment Guidelines for Licensed Agent and Administrative Staff Activities

Fulfillment type models provide significant assistance to producers and free them up to concentrate on selling insurance products. While these methods are helpful, there are also certain activities that only a licensed agent can perform, which cannot be delegated to any unlicensed personnel.

As a reminder, below are important guidelines that you must follow if you are operating in, or anticipate operating in, a fulfillment type of environment.

Acts of Agents
Although the different state jurisdictions define the acts of an agent somewhat differently, all states would consider solicitation, negotiation and effectuation of insurance as activities that require an agent license, training where required and appointment if applicable. These activities may take the form of face-to-face contact, telephone contact or correspondence such as e-mail or faxes. State licensing requirements also do not define these activities with much specificity. These activities are instead generally described as follows:

Soliciting — Any activity that seeks or attempts to ask, persuade or urge an individual to purchase an insurance policy or features.

Negotiating — Conferring with or offering advice to a customer, or any other action, which brings about an understanding or agreement to a transaction that is designed to settle or arrive at a resolution of the terms or features of a policy.

Effecting — Any action designed to complete, bring about, put into effect, bind, eliminate or cancel a policy of insurance or additional insurance coverage.

The following activities absolutely require a license:

  • Explaining, interpreting or recommending coverage limits, benefits or payments.
  • Effecting temporary or conditional insurance.
  • Making sales involving replacements of existing coverage.

Acts Exempt from Licensing Requirements
Although the requirements vary by state, general categories of activities that do not require licensing could be described as follows:

  • Acts that are administrative or clerical.
  • Acts that are only indirectly related to the sale of the product.
  • Acts for which no commissions are payable.

Please remember that state laws may differ from these general guidelines, and you should consider specific bulletins or regulations in your state.

Current Processing Environment
Technology advances have changed the industry and producers are confronted with a broad array of services that will help them fulfill the application process. Genworth wants to remind you, however, that you should always keep licensing requirements in mind when relying on such services. The questions you should ask are:

  • What tasks are being performed on my behalf?
  • Do these tasks require licensing?
  • Are the people performing these tasks licensed?

Our goal is the same as yours and your producer – to issue policies for new business in accordance with the regulations of the state. As usual, we rely on you to comply with state licensing requirements when soliciting, negotiation and effecting insurance. If you have a fulfillment center or are considering implementing a fulfillment-processing model, please ensure that all functions requiring a license or training (as defined in “acts of an agent” above) are only completed by staff or agents who hold a valid license, are appropriately trained where required and appointed if applicable in the appropriate jurisdictions.

If you have any questions regarding this bulletin, please contact your Client Relationship Manager with your specific questions, and he or she will work with our legal and compliance organizations to answer your questions and concerns.

Fulfillment Guidelines for Licensed Agent and Administrative Staff Activities