When is it working outside of domiciled State

[fed up]

Well, you asked about home and auto and life. I answered and you dont agree. Do it however you want. Endorse whatever comes your way. Write in states where you dont have a license. Best of luck, make sure your E&O is paid up and maybe you will never need it.

 

[URDRWHO]

Well, you asked about home and auto and life. I answered and you dont agree. Do it however you want. Endorse whatever comes your way. Write in states where you dont have a license. Best of luck, make sure your E&O is paid up and maybe you will never need it.

Give me the court case where it was an E&O issue and I'll agree. Breaking a State rule is not an E&O issue and unless there was fraud on the application the insurance company would have no legal causation to not pay a claim.

I read court cases all the time, they interest me. Here is one that I was reading for my letter to the DOI of PA.

https://courts.illinois.gov/opinions/AppellateCourt/2011/1stDistrict/March/1100521.pdf

Plus what I really want is the citation from State DOI laws. My State DOI site stinks for laws.

I'm in the process of reading my State's insurance law of 1921 and amended in 2002
So in my State what does (ii) mean about risks in more than one State under that contract and you are exempt from being licensed as a Producer. PA licenses are Producer not agents or brokers. What do you think it means to have one insurance contract and there are other State risks covered withing that one contract? Just ask'in?

(b) Exceptions.--The following persons shall not be insurance producers for purposes of this act:

(7) A person who: (i) Is not a resident of this Commonwealth. (ii) Sells, solicits or negotiates a contract of insurance for commercial property and casualty risks to an insured with risks located in more than one state under that contract. (iii) Is licensed as an insurance producer to sell, solicit or negotiate that line of authority in the state where the insured maintains its principal place of business. (iv) The contract of insurance insures risks located in the state where the insured maintains its principal place of business.

(ii) Sells, solicits or negotiates a contract of insurance for commercial property and casualty risks to an insured with risks located in more than one state under that contract.

Solicit or negotiate that line of authority in the state where the insured maintains its principal place of business. (iv) The contract of insurance insures risks located in the state where the insured maintains its principal place of business."

I'm on page 97 of 156 and my eyes are tired but tomorrow I will read more. I want to know the definition of selling. So far there is a lot of jibber jabber and grey areas. Such as the one about selling life insurance to an out of State person visiting your office. So far it says nothing about that one. Nothing about endorsing a policy is selling.

Here is an exemption where you can be paid but not holding a current license. --

(b) Exception.--An insurance entity or licensee may pay: (1) a renewal or other deferred commission to a person that is not a licensee for selling, soliciting or negotiating a contract of insurance if the person was a licensee at the time of the sale, solicitation or negotiation; or (2) a fee to a person that is not a licensee for referring to a licensee persons that are interested in purchasing insurance if the referring person does not discuss specific terms and conditions of a contract of insurance and, in the case of referrals for insurance that is primarily for personal, family or household use, the referring person receives no more than a one-time, nominal fee of a fixed dollar amount for each referral that does not depend on whether the referral results in a sale.

Maybe tomorrow I will see what is and isn't servicing a contract opposed to new sales. I am one of those people who really would ask to define the word "is" (Bill Clinton).

 

[WMSG]

I can't speak to the P/C side of this. However, for life, the rules have drastically changed over the years. Not only are state DOI/DOBI revisiting their respective rules and regulations and how they look at them, insurance companies are doing the same. I serve on several committees, and have interfaced and dealt with with DOI's/DOBI's, and for many reasons they are more rigid in their views, and less lenient on what they allow. So are insurance companies.

Now, while the P/C world is different, if this were in fact a life issue -- why not just get licensed in the "other" state? Even if it were a few hundred dollars, I think you better off being safe and prudent, as opposed to potentially having a problem. As far as the E&O issue, first, there is a reason why situations are called accidents, problems, and mistakes. Just one being is that you didn't plan on it happening. So, being proactive with the what if's, precedent, analysis, etc., can be an exercise in futility. Second, not every complaint, E&O claim, or lawsuit is completely objective in nature. People interpret rules, regulations, laws, and more any way they want, and of course to suit whatever they want it to be. I am sure any of this can be justified, rationalized, and more. I absolutely see how this could develop into an E&O claim. It doesn't have to be limited to breaking a state rule. Where it goes and where it ends up, nobody knows.

Why all the end-around and run-around? Why the contortionist efforts to not get licensed? If this were a life case situation it would be a fallacious discussion because you would just get the license. You do business in a state, you advise in a state, or you do business on or advise on something in a state...whatever the case might be...keep it simple, be safe, and get the license!

 

[fed up]

I want to know the definition of selling. So far there is a lot of jibber jabber and grey areas. Such as the one about selling life insurance to an out of State person visiting your office. So far it says nothing about that one. Nothing about endorsing a policy is selling.

If you don't have a license in the state where the paper was written on P&C policies, your endorsement of that policy does not have to be honored by the insurer because, in their eyes, you are not an agent. Life policies are different but even they have wording that defines where the application was taken.
But, again, do it however you wish. Insured are your best friend until the day that they don't get what they want,and then the complaint that they file becomes an E&O issue. Maryland allows for each consumer to file a complaint for any issue that they have with an insurance carrier and if they don't like the outcome of the decision on the complaint, the consumer is given the right to a formal hearing. I would not want to stand before a hearing examiner and explain that I did not have a resident or non-resident license in the state and that I thought it was okay for me to endorse something on a different state's policy for property located in Maryland because I was too cheap or too lazy the get a non-resident license. State rules and Insurance Carrier rules are two different animals. The insurance carrier rules are what bring most E&O issues. so if Liberty Mutual decides that there was no policy, therefore no coverage, the complaint goes to you and your E&O carrier. Your acceptance of an appointment with a carrier implies that you know the rules of the state and the carrier, your license is proof that you know the rules of the state

 

[URDRWHO]

So I read the entire law and some if not many things are as clear as mud. Which muddy can so many tie be attributed to written statutes. Do they do it on purpose?

One interesting thing is in my State the DOI may waive requirements for a person applying for nonresident licenses.

Section 605-A. Application for insurance producer license.

(a) Waiver.--The department may waive the requirements for a person applying for a nonresident insurance producer license in this Commonwealth that possesses a valid insurance producer license from the person's home state if the person's home state awards nonresident insurance producer licenses to resident licensees of this Commonwealth on the same basis.

So it comes down to defining selling which was never defined in the Act. If someone calls you and says - add my new car. Is that selling? If that isn't selling then it is administrative work to an existing insurance policy.

Just as the life insurance sale to an out of State person who is on the soil of your domiciled State is not defined, my situation is not defined. Therefore it is opinion and since this is a rare situation for me, it would have been a $27 commission --- I'm done musing over with it. I'll ask someone at the DOI the next time I talk with them.

 

[fed up]

Pennsylvania has reciprocal agreements with other states as far as resident/non-resident licenses are viewed. If Virginia recognizes the license in Pennsylvania, Virginia allows for a non-resident license for the Pennsylvania agent with just a filing fee and you get a license which looks very similar to the state license. It is clearly marked NON-Resident. If I complete my CE credits as outlined in my resident state, the non-resident state accepts that I still have a license. Some states mandate that all CE courses must be proctored, some don't, some only want a few courses proctored. I have written life policies for relatives in other states but always took the application in the state where I was licensed. Those policies were sometimes transferred to resident agents. But I would NEVER endorse an out of state policy, where I was not appointed as a non-resident licensed agent, because that endorsement carries no coverage.
Since you have been all over the park with P&C, life, commercial, and WC questions on a simple 'Do I NEED a non-resident license', I'm not sure if I have addressed all of your twists and turns. The simple answer is 'Yes, you need a non-resident license'
Fed Up out.

 

[URDRWHO]

If you don't have a license in the state where the paper was written on P&C policies, your endorsement of that policy does not have to be honored by the insurer because, in their eyes, you are not an agent. Life policies are different but even they have wording that defines where the application was taken.
But, again, do it however you wish. Insured are your best friend until the day that they don't get what they want,and then the complaint that they file becomes an E&O issue. Maryland allows for each consumer to file a complaint for any issue that they have with an insurance carrier and if they don't like the outcome of the decision on the complaint, the consumer is given the right to a formal hearing. I would not want to stand before a hearing examiner and explain that I did not have a resident or non-resident license in the state and that I thought it was okay for me to endorse something on a different state's policy for property located in Maryland because I was too cheap or too lazy the get a non-resident license. State rules and Insurance Carrier rules are two different animals. The insurance carrier rules are what bring most E&O issues. so if Liberty Mutual decides that there was no policy, therefore no coverage, the complaint goes to you and your E&O carrier. Your acceptance of an appointment with a carrier implies that you know the rules of the state and the carrier, your license is proof that you know the rules of the state

What the heck is your basis of opinion on contracts. Insurance is a contract and a life contract still follows the same laws of contract as a P&C contract. You are giving opinion. Your E&O story probably has more to it than someone adding an endorsement.

I am not even licensed with the P&C insurance companies. I work through a membership arrangement that I pay annual fees (think Iroquois) but it isn't them.. Although I've never been with Iroquois and don't know if they are still around or have the same membership arrangement they had 20 years ago.

This is the arrangement. You can do all kinds of things through the rule of membership and this is how I am defined in the membership contract (hereinafter referred to as “Member”)

WHEREAS, General Agent is a duly licensed insurance agency
WHEREAS, General Agent desires to undertake the placement of insurance risks for Member

My main company that is outside the membership doesn't require a contract with them, they are open contract and they don't have to pay the fee to the DOI. You know that there is a fee for every producer that an insurance company has on their roster as a direct writer.

Everything isn't black and white in the law. You know you can sell 401K plans with variable annuities and not be licensed for sales of securities. Now that was a PITA when I had my S7 for 15 years. NASD and now FINRA are nothing more than a legal mafia wetting their beak. In fact way back almost 100 years ago (1933 I think was the year) when the entire securities laws were enacted there was never supposed to be just one SRO. One SRO means a monopoly and that is never good.

Well I have to go. Sadly I must send out a card to a guy I know because his father just died from COVID. Ugh!

But reading the law, the Statute was informative in many ways.

 

[Allen Trent]

I think you are all set. you endorsed for Structures off premises for a sale in your state to a resident of your state & with a carrier in your state. Many HO policies provide worldwide liability coverage & endorsement coverages that are not defined by a state line. If you were trying to sell an endorsement to some one in Maryland, I think you would have an issue.

Similar to you endorsing a HO policy to provide some small business pursuits coverage for say a woman selling mary kay, etc. if the person chose to have a Mary Kay party across the river & in another state, I am sure the coverage would extend unless the endorsement language stated coverage only applied in the state.

In your case, you have even better support because you gave a specific address for the boat slip to be covered at a Marina in another state.

 

[URDRWHO]

I think you are all set. you endorsed for Structures off premises for a sale in your state to a resident of your state & with a carrier in your state. Many HO policies provide worldwide liability coverage & endorsement coverages that are not defined by a state line. If you were trying to sell an endorsement to some one in Maryland, I think you would have an issue.

Similar to you endorsing a HO policy to provide some small business pursuits coverage for say a woman selling mary kay, etc. if the person chose to have a Mary Kay party across the river & in another state, I am sure the coverage would extend unless the endorsement language stated coverage only applied in the state.

In your case, you have even better support because you gave a specific address for the boat slip to be covered at a Marina in another state.

Yep, sold to a resident of my State, an admitted carrier of my State and on an insurance contract that is legally filed within my State.

My position is the same as you mention and I have it backed up by reading that looong Insurance Act of Pennsylvania. If coverage were defined by State lines you could never buy a car out of State and have it covered, never be covered for property or casualty out of State. It would be a mess.

The problem I have run into is the membership contract I signed when I went with the agent membership organization. It was a long time ago that I signed their contract and I think that -

1. In their attempt to keep people from writing new insurance contracts in a State where the member is not licensed, the language in their membership contract is vague
2. The person that I get quotes from at the agency is taking a stance that an endorsement is like writing a new insurance contract

This is how their membership clause in question is written -

"Member represents and warrants that if the Member requests General Agent to place coverage for risks located outside Member’s State of Domicile, Member will obtain and maintain all necessary non-resident corporate, agency or individual producer, agent or broker licenses in accordance with the requirements of each state in connection with requested placement."

To accomplish what they wanted, which was without doubt, to prevent the sale of insurance contracts in unlicensed States, language like what I have written below would be clear and legal:

"Member represents and warrants that if the Member attempts to Sell , to exchange a contract of insurance by any means for money or its equivalent on behalf of an insurance entity or to attempt to sell insurance or ask or urge a person to apply for a particular kind of insurance from a particular insurance entity outside Member’s State of Domicile, Member will obtain a non-resident license for such State."

The words place coverage may seem clear but the phrase really isn't clear, it is open to interpretation. The question an attorney would ask is "what is place coverage?" Place coverage can be different among different people. My person thinks place coverage is adding an endorsement but to me place coverage means what the Department of Insurance has in their legal statute (selling, soliciting). Selling and soliciting has a legal definition in the State law but placing coverage does not have a legal definition.

Property and casualty is defined in the Act and no place in the Act does it say that property must be located in PA.

• Property. Insurance coverage for the direct or consequential loss or damage to property of every kind.

• Casualty. Insurance coverage against legal liability, including that for death, injury or disability or damage to real or personal property.

Yep I signed that membership contract with the language in it, slap me on the head. But there is the law and then there is the spirit of the law. I am confident that the spirit of the contract was to stop unauthorized out of State sales of insurance contracts.

An endorsement is not selling or soliciting an insurance contract. An endorsement is only adding, removing, changing a policy that I legally sold in my State and done at the request of the owner of the insurance contract.

International Risk Managment, Inc. describes an endorsement as "an addendum to the insurance policy that changes the original policy provisions. Endorsements may serve any number of functions, including broadening the scope of coverage, restricting or limiting the scope of coverage, clarifying the application of coverage to some unique exposure, adding other parties as insureds, or adding locations to the policy."

I don't want to get my quote person in trouble but I think she is misrepresenting the spirit of the language in my membership contract. It isn't the first time.

Last month I had a client that wanted to add the umbrella coverage option that is available on their Encompass policy. She wanted me to complete an umbrella Acord application. I said no, all you have to do is ask Encompass to add it that available option to their policy, it is an option with Encompass, just like asking to adding other available Encompasses options like trip Interruption coverage. You send the request to add or remove --- no application needed.

Well in the end the umbrella was added, no Acord needed. The one associate said the reason they first wanted an Umbrella application was because they like to cover their butts.

So the question now becomes, do I need to talk to a higher up within the agency? Or don't rock the boat, just let it go, my plan is to be fully retired as of 12/31/2021. But really I feel this matter needs to be addressed.

 

[marindependent]

I hate to break into this debate with a serious question, but...
Just to confirm: you are simply extending liability coverage from the main home (in your state) to the dock of the insured in another state?
Did you ask the insurance company if you need a license for this?
Did you make the change or did you have the insured call the insurer to make this change?