Staff Activities Allowed if No License/E&O

[Pamchi]

I posted before but it did not show up. I am asking of anyone's experience here who would be concerned if your employer is delegating the basic agent duties to unlicensed employees without direction and supervision? We work on accounts all over the US (non-resident P&C and Surplus Lines) and from my research, this is in violation of most states' insurance statutes.

I checked several different insurance statutes for a variety of states, and they are clear that an agent is a "person" and not an "entity" and that certain activities are supposed to be performed by a licensed agent only.

The questions I have are: if an insurer grants this agency binding authority - does this mean that the unlicensed employee is underwriting and doesn't need a license? This same employee would be talking to insureds, quoting; as I said, acting as the agent. The licensed agent is the owner, but this is someone who is only at work a few hours a day and there are no other staff licensed in all states.

Further to that, and more specifically, if the unlicensed employee performs an act that the agent did not direct them to do specifically and this creates a claim - keep in mind the employer knows the work the employee is doing most likely would require a license - would the E&O company deny the claim?

My thinking is that because unlawful/dishonest acts are not covered under E&O, the employer (i.e. agency) knew the unlicensed employee would perform actions of an agent, then the E&O coverage is not there.

Lastly, I was asked to obtain non-resident licenses in a few states so we can write business - should I be worried? Likely nothing would happen, but if there were an E&O claim, would this affect me or should I just surrender the non-resident licenses and tell my employer that ethically, I can't work on accounts in states where he is not licensed? Again, if the agent knows he is not licensed, any activity would be excluded from E&O based on it being dishonest.

Any advice/opions on this would be appreciated!

 

[b61mack]

why? are you are second guessing your boss! if you are not happy, find another job.

 

[Pamchi]

I like what I do, just not where

...and I'm wary with good cause. There are no set agency practices in place, no diary system, no central database that tracks client contact, so it is problematic for a million reasons.

I did conclude that this question is probably too complex, since most agents don't work a lot with surplus lines and maybe that's why.

If I am licensed in a non-resident state - but the boss isn't and his agency isn't - then the surplus lines tax/fees on those accounts written in that state have to be paid and filed under my license, not his.

I have no authority of unlicensed staff on how these out-of-state accounts are handled (only concerned with a few states here), yet if there were an E&O claim, I am worried (maybe too much so) that I would get dragged into it, since my license is filed with the state.

Hope that all makes sense. I am probably making a big deal of nothing, but I'd rather not worry all the same.

After much more research, I have decided to surrender my non-resident licenses, which will solve the problem. Then, the staff can do their thing, I can still do my job and not worry about what they do affecting my license/reputation.

And...yes, I am looking for a new job. I'm not a bad employee - I'm actually very organized and efficient - so being at a place that is disorganized is not good.

Thanks to anyone who can add to this, I was hoping for more replies, but I guess I figured out my plan of action.

 

[BlockO]

I'm no expert on this subject, as I am only licensed in Ohio and nowhere else. but here is my take on your situation:

surrendering your non-resident license is not solving the problem, it's avoiding it! I wouldn't do that because it's a lose-lose situation for you on two counts:
1. if you decide to stay, surrendering the license will very likely piss your boss off and force he/she to get licensed in that state also, which will greatly diminish your personal value to that agency.
2. if you decide to leave, your having a license in another state may be an asset for you in terms of employee demand and getting hired with another agency (especially if you live near a state border close to where you have the non-res license).

I wouldn't worry too much about the E&O part of it. If any liability would occur, it would most likely fall upon the agency.

But if non-licensed employees at your boss' agency are binding coverage under your name (which they must be if you're the only one there licensed in that state), then YES, I would have a major problem with that!

as far as your boss asking you to get licensed in more states, it sounds as if you're being pimped out. the glaring question is why would your boss ask you to do it, instead of doing it their self? sounds like he/she wants to pay you at the employee rate, when you should be demanding a rate more along the lines of a business partner.

 

[Pamchi]

The owner can't get licensed - revocations due to Administrative Actions.

Despite this, we still write in at least a few states without the SL license...which is also scary. The owner won't decline those risks. I won't work on anymore accounts in those states, either, since I actually researched the statutes and it is clearly, unambiguously against the law. In fact, in one of those states, it is a felony.

There is no E&O that will protect me or him or any staff from breaking the law, as far as I know.

Surrendering the licenses is the right thing to do; I see no need for me to have a license, when clearly the owner and the coworker are so cavalier - it is a real source of anxiety.

They think that as long as the state in question doesn't know they are writing business without the proper license, they can still do it - that's dangerous. Might as well just forget licensing for any profession, right? I understand much better now why a license is needed; it is supposed to keep only knowledgable people in the field, which I think it does.

I've worked with the unlicensed person for a little while now, and it is clear that she struggles to comprehend and explain even the simplest coverage issues. I don't want to worry about what she might mess up on an account in one of those states where the license is in my name.

I appreciate the reply, I do. I'm disappointed to realize that I misunderstood the objective when I started there. I thought it was to improve things, run like a normal agency; boy, was I wrong.

 

[xrac]

Run from this owner as fast as possible.

 

[Bertolinoins]

Run from this owner as fast as possible.

Agreed. Polish up the resume and leave ASAP. You don't want to be there when the various DOI's catch up with what is going on.

 

[b61mack]

if the insurance is written on your license, it is your book of business. have a meeting with the owner, don't be a wouss, tell them you want full control on all business written on your license. you are in deep, make it work, for yourself.. take control... or leave with, your book of business. if you leave, make sure, they don't continue writting on your license. do not surrender your license..