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Glossary of Insurance Licensing Terms

NIPR is a non-profit company that provides insurance licensing data. NIPR maintains the producer database (PDB), houses insurance producer and agency provided by the states into one uniform system.
Third Party Administrator (TPA)
An independent entity that handles administrative functions for employers and insurance companies, typically for employee benefits like health insurance, retirement plans, and workers' compensation. Their services include claims processing, plan administration, enrollment, and compliance management, offering customized solutions to meet client needs.
Errors and Omissions (E&O) Insurance
E&O insurance safeguards professionals and businesses from negligence claims related to their services. It covers legal costs, settlements, or judgments resulting from such claims. This protection is vital for professions where errors could have substantial financial or legal consequences. E&O insurance serves as a risk management tool, shielding assets and reputation from potential liabilities.
A licensed individual or entity authorized to sell and service insurance policies.
A contractual agreement between an insurance agent or broker and an insurance company authorizing the agent to sell the company's insurance products.
Bail Bond License
A specialized license that allows an individual to underwrite and sell bail bonds for individuals who have been arrested.
A licensed individual or entity who can represent multiple insurance companies and help clients find the most suitable insurance policies.
CE Credits (Continuing Education Credits)
Units earned by insurance professionals for completing approved continuing education courses which are required for license renewal.
CE Provider (Continuing Education Provider)
An organization or educational institution that offers courses and materials for licensed insurance professionals to fulfill their continuing education requirements.
The act of adhering to the laws regulations and ethical standards governing insurance licensing and operations.
Contingent Commission
Compensation paid to an insurance agent or broker based on the achievement of specified performance criteria or sales goals.
Department of Insurance (DOI)
A state government agency responsible for regulating and overseeing insurance activities within the state.
Designated Home State
The state in which an insurance producer holds their primary resident license.
Designated Responsible Licensed Producer (DRLP)
An individual responsible for the conduct and compliance of other licensed producers within an agency or organization.
The process of capturing an individual's fingerprints for background checks as part of the licensing application.
Insurance Licensing Exam
A standardized test that assesses an individual's knowledge of insurance concepts and relevant laws typically required for obtaining an insurance license.
Insurance Licensing Specialist
A professional or entity that specializes in helping individuals navigate the insurance licensing process and maintain compliance.
A formal document issued by a state's Department of Insurance that authorizes an individual or entity to sell insurance.
A person or entity that holds a valid insurance license.
Licensee Conduct Standards
Guidelines and ethical standards that licensed insurance professionals must adhere to in the course of their business activities.
License Renewal
The process of extending the validity of an insurance license typically requiring the completion of continuing education and payment of renewal fees.
License Reconciliation
A process that ensures that licensed insurance professionals have completed all the necessary steps to maintain their licenses in good standing.
License Reinstatement
The process of restoring a previously suspended or revoked insurance license often requiring certain conditions to be met.
License Surrender
The voluntary relinquishment of an insurance license by an individual or entity often used to avoid disciplinary actions.
License Suspension
The temporary revocation of an insurance license due to violations of regulations or laws.
License Termination
The cessation of an appointment between an insurance agent or broker and an insurance company which may be due to various reasons such as contract non-renewal.
Licensing Fee
The cost associated with obtaining or renewing an insurance license typically paid to the state's Department of Insurance.
Limited License Line of Authority (LLLA)
A restricted license that permits the sale of specific insurance lines such as crop hail surety or credit insurance.
Limited Lines License
A type of insurance license that authorizes individuals to sell specific types of insurance such as credit insurance travel insurance or rental car insurance.
National Producer Number (NPN)
A unique identification number assigned to insurance professionals for tracking purposes.
Non-Resident Adjuster License
A license that permits an adjuster who resides in one state to work on claims in other states where they are not a resident.
Non-Resident License
A license issued by a state to an individual or entity that resides in a different state but wants to sell insurance in the issuing state.
Pre-Licensing Education
Required coursework and training that individuals must complete before taking the insurance licensing exam.
Producer Database (PDB)
A central database that tracks insurance license information and facilitates the sharing of data among state insurance departments.
Producers License
A license that allows an individual to sell insurance products in a specific line of insurance (e.g.
Public Adjuster License
A license that allows an individual to represent policyholders in negotiating insurance claims with their insurance companies.
An agreement between states that allows an individual with an insurance license from one state to obtain a license in another state with reduced or no additional requirements.
Regulatory Authority
The government agency responsible for establishing and enforcing insurance laws
Resident License
A license issued by a state to an individual or entity that resides or operates within that state.
Surplus Lines License
A special license that allows an agent to sell insurance for risks that standard insurance carriers are unwilling to cover.
Temporary License
A short-term license issued in special circumstances
The cessation of an appointment between an insurance agent or broker and an insurance company
Variable Contract License
A specialized license that allows an individual to sell variable annuities and variable life insurance products
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