Who Needs an Insurance License?

Legal Definition

The Texas Insurance Code requires licensing of any person or entity who performs one or more of these functions:

  • solicits applications on behalf of an insurance company or health maintenance organization
  • takes or transmits any application for insurance or membership in a health maintenance organization
  • takes or transmits any policy of insurance to or from an insurance company
  • advertises or otherwise gives notice that an application or policy will be received or transmitted
  • receives or delivers a policy of insurance
  • examines or inspects any risk
  • makes or forwards a diagram of a building
  • receives, collects or transmits any premium
  • performs any other act or thing in the making or consummating of any contract of insurance
  • examines or adjusts any loss

Any person or entity that meets the definition, unless specifically exempted under the relevant licensing statute, must be licensed under one or more of the following license categories depending on their authority and type of insurance handled. After selected categories you will find a link to more in the way of description and requirements.

  • General Lines Property and Casualty (formerly Local Recording Agent or Solicitor) (more info...)
  • Personal Lines Property and Casualty (more info...)
  • Insurance Service Representative (more info...)
  • Limited Lines Property and Casualty (formerly Farm Mutual, County Mutual (aka Group 2), Motor Vehicle Only, Crop, Prepaid Legal Services)
  • General Lines Life, Accident, Health and HMO (formerly Life, Accident & Health (aka Group 1), HMO, Accident & Health (aka Group 2), Variable Contracts, HMO) (more info...)
  • Limited Lines Life, Accident and Health (more info...)
  • Life Agent (more info...)
  • Funeral Prearrangement Life Insurance
  • Specialty License (see Specialty Licenses, on the TDI site)
  • Managing General Agent (more info...)
  • Surplus Lines Agent (more info...)
  • Risk Manager (more info...)
  • Adjuster (more info...)
  • Life and Health Insurance Counselor (more info...)
  • Third Party Administrator (more info...)
  • Premium Finance Company (more info...)
  • Title Insurance Agent

Exception for Clerical Employees

Some employees of an insurance agency do not need to be licensed. The licensing law specifically exempts the following employees from licensing requirements: "A salaried employee who is not involved in solicitation or negotiation of insurance in the office of a licensed agent who devotes the employee's full time to clerical and administrative services, including the incidental taking of information from customers and receipt of premiums in the office of a licensed agent, if the employee does not receive any commissions and the employee's compensation is not varied by the volume of premiums taken and received."

In IIAT's opinion, salaried employees in the following positions (with duties typical for the job description as we understand them) do not need a license: receptionist, bookkeeper, mail handler, claims handler, x-date telemarketer, and CSRs and their assistants who take information only (no quoting). We believe that any employee who quotes premiums or discusses coverage options with customers must be licensed.