License issue (which state?)

[Guest]

Agent is licensed in CA. Client who resides in CA wants to buy a life policy for friend (biz partner, adult child, whatever) who resides in NY (friend will be insured, not beneficiary). Can agent write it or does agent have to be licensed in NY?

How about if this was for health care?

Where the insured lives, not the owner, is the state the agent has to be licensed in, right?

Thanks,
Al

 

[Sam]

What is most important, at least for life insurance, is where the app was signed. You can have a client that lives in Boston, comes to Cali for vacation, signs a policy, goes home and gets a paramed in Boston, and has the policy mailed to him there, and all you need is a California license.

 

[arnguy]

Agent has to have a non-resident license to write any type of insurance in New York or any other state other than the one in which he has a resident license. As to the other part of your inquiry, I believe the resident state of the policy owner would prevail. I am not absolutely certain, but I know with health insurance group policies here in PA the policy can be written with a PA license if the employer is based here. In many cases there are some employees that are covered that reside across the river, i.e., in New Jersey. Perhaps someone on the board can expand this further.

 

[Sam]

For group health, you need a license in whatever state the business is domiciled in.

 

[Guest]

What is most important, at least for life insurance, is where the app was signed. You can have a client that lives in Boston, comes to Cali for vacation, signs a policy, goes home and gets a paramed in Boston, and has the policy mailed to him there, and all you need is a California license.

The issue is 'who' is the client... the owner of the policy, or the insured? If owner lives in CA and agent lives in CA but insured lives in Boston, I would think all agent would need is a CA license if this were life.... and that para med could be done anywhere.

However, I don't know about if this were a health policy.

Hell, I don't know anything!!!!

Al

 

[johnrocks]

If it were any state but New york!! They have some of the toughest anti-biz laws on the books.

 

[Sam]

The issue is 'who' is the client... the owner of the policy, or the insured? If owner lives in CA and agent lives in CA but insured lives in Boston, I would think all agent would need is a CA license if this were life.... and that para med could be done anywhere.

On the life side, It doesn't matter who is the client, although the answer is the owner. It also doesn't matter where either of them live, as long as the app is signed in the state where you are licensed.

Now, there is a separate issue of the legality of soliciting business in a state that you are not licensed, but that would not be the case here.

 

[Michael Haislip]

The person being insured is all that matters here (the "applicant"). It doesn't matter who the payor or owner is.

Health carriers generally require separate licenses and appointments for each state you plan to do business in. I'm pretty sure they'll look at the applicant's residency as the primary criteria.

In short, you'd likely need a Massachusetts non-resident license and then a separate Massachusetts appointment from whatever carrier you write with.

 

[arnguy]

Of course, Sam, you are 100% correct, my point being that with group health it is where the employer is based (domiciled). In this area (southeastern PA) there are many businesses that have employees that reside in NJ, MD, and DE but the group policy is written here in PA.

With regard to individual policies, I believe that it is necessary for the policy owner to be physically present in the state where the agent is licensed. This would hold true for states where the agent holds non-resident licenses. Thus, you will see many agents that write business (including health) in many states as long as they are non-resident licensed in those states without actually meeting with the client face-to-face. However. you can hold only one resident license in one state.

Agents that do not have non-resident license can get around this by having the client physically present in PA to sign the app. This is OK as long as the client crosses the bridge, i.e., the Ben Franklin Bridge from NJ and meets with the PA agent on the PA side of the bridge. It is my understanding that this would apply regardless of the resident state of the client----for instance, there are cases where family may be visiting from CA and the agent can write them when they are here in PA.

It is probably easier to just get non-resident license if you plan to do business in other states with individuals. This is particularly true if you sell on the internet. As to whether the residence of the policyowner or the insured control where the license is valid, I believe the resident state of the policyowner would prevail. For, example a divorced spouse living in PA may wish to purchase insurance for a child who reside in another state with the custodial spouse.

Jophnrocks is so right about New York. Sorry for the long discourse, but right now I am in the State of Confusion

 

[Dave020]

Original question was about life insurance. If it's a business life case, as long as the insured signs the application in California, and the owner is in California, you should be ok.

I used to be with Northwestern Mutual and we did several key man, deferred comp and buy/sell cases here in CA where one of the partners was in another state. We did the apps when that partner was in California and it was never a problem.

At the same time, we had issues with doing group for multi-state with some of the companies as they had more than 50% in the other state. In those cases we would look to see whether they were on the CA DE-6 or not. If they were reported separately in the other state, it was considered a separate business and did not count against participation.

Dave
www.davefluker.com