Corporate Licensing Question

[russelltw]

Board,
I have my company set up as a S corp and am running in to the following trouble with out of state appointments.

If my license with XYZ insurance comapny is with my agency, they will not contract myself as the agent. THey tell me I have to have both the agency and myself licensed in the non-resident state.

My cpa says I can license myself only in non-resident states and then just assign my commissions to the company and have them paid into the agency bank account.

Question is, do you have your agency licensed as well as yourself licensed in multiple states or do you just have your company licensed in your resident state but just yourself licensed in non-resident states?
Thanks
R

 

[Tahoe Ray]

Board,
I have my company set up as a S corp and am running in to the following trouble with out of state appointments.

If my license with XYZ insurance comapny is with my agency, they will not contract myself as the agent. THey tell me I have to have both the agency and myself licensed in the non-resident state.

My cpa says I can license myself only in non-resident states and then just assign my commissions to the company and have them paid into the agency bank account.

Question is, do you have your agency licensed as well as yourself licensed in multiple states or do you just have your company licensed in your resident state but just yourself licensed in non-resident states?
Thanks
R

I've done this before and my CPA has given me similar advice. For personal production, I license as an individual and assign commissions to my agency (an LLC that files as an S Corp)...

I would be interested to hear how others do this as well.

 

[ILSAinc]

It is understandable that an accountant would advise you NOT to license the agency in order to save on corporate compliance such as license renewals, and corporate & annual returns for the entity. However: I would caution you or any other agent to contact the Department of Insurance before attempting to bypass the agency licensing process. Not only are many carriers likely to require agency licensure, prior to an appointment, the DOI’s themselves, upon seeing an appointment to an agency that is not properly licensed in their state – thanks to the National Producer Database where appointments are visible - could issue the agency an administrative action (a sanction), for doing business in their state without a license. This could run up some pretty hefty fines and alert the Secretary of State and/or the Departments of Revenues in those states where the agency has received commissions. This action could then spark an audit in those departments and result in more fines.

Remember: in the insurance compliance world, if it looks like a commission, smells like a commission and pays like a commission … IT IS A COMMISSION! Basically, if the agency’s name is on the policy or receives a commission on that policy, the state AND the carrier may demand a license for the agency in that state.

Do agencies find ways around this sometimes? Of course, but then again, I can get around driving without a driver’s license as well … right up until I get caught.

Lisa Miklojachak
Insurance Licensing Services of America, Inc.

 

[Mick_Keyou]

Just saw this while searching. I'm looking for the same information. I emailed the DOI in FL. I'll post their response when I get it.