Cross-country moves always present a challenge. But it can be especially difficult for insurance producers, whose nonresident licenses are contingent on resident state licenses.
For insurance producers, it’s not simply a matter of getting a new job and moving into a new house. Instead, they have to change their resident insurance license to a new state, and then communicate back to all their other states of operation that the new state is their resident state. Additionally, the process for making that change will vary based on what state you’re moving out of and what state you’re moving into.
Like everything else in the insurance sphere, different states have different rules. If you are wondering about how to transfer your insurance license to another state, read on. We’ve got a quick guide to help you start your to-do list to keep your insurance license in-force.
If you’re an insurance producer moving to a new state, you’ll need to notify your current resident or home state that you’re moving, and you’ll need to apply for a new resident license in whatever state you’re relocating to. The best practices for how to do that and in what order depend on two questions:
Before we dive in on specific guidelines with these questions in mind, we’d like to emphasize that these rules are subject to change, and you should absolutely do your due diligence regarding the specific rules of the states you’re dealing with. Things change, so always try to keep up to date regarding both your resident and nonresident continuing education (CE) requirements, as well as their reciprocity..
A handful of states will only process resident state changeovers via paper, while several more recognize both paper and electronic means. If possible, though, you should go with electronic means because of the inarguable need for speed. Not to mention, if you’re moving your household, you certainly don’t want to have your resident state license transfer paperwork sitting in a mishmash stack of random assorted paperwork on the dining room table.
Timing is everything, and, while the logistics of moving are always stressful, procrastinating on changing your license can be career-ending. You never want to operate without a license, so it bears to be mindful of what kind of a timeline your new state is working in. Some states allow you to operate for days or even months while you transfer your license over, others require you to have your new resident insurance license lined up well before you move. Just know what you’re dealing with, and make your insurance compliance a priority.
If you’re moving to a state where you aren’t licensed at all, you’ll want to start by reading through and determining whether it’s best to begin as a transferring resident insurance license holder, or whether you’re better off first obtaining a nonresident insurance license. In making this decision, you’ll want to look at your timeline – typically, the shorter your timeline, the better off you are starting out as a resident license holder – but some states make it very easy to change a nonresident license to a resident license, so that’s a very doable way to simplify the process. (If you have the time and fortuitous circumstances to go this route, jump on down to “Becoming a resident of a state you’re nonresident licensed in.”)
If you’re going to start out as a new resident license holder, you’ll want to check out how your new state validates insurance licenses. Most states review the National Insurance Producer Registry’s (NIPR) producer database (PDB) to validate licenses – it’s as simple as plugging your national producer number in and seeing where you hold a current license.
Ten states (plus Texas, which accepts either) require what’s called a “clearance letter,” or a “certification letter” to validate your license. In those states, you’ll need to file a form with the state and pay a fee to have your old resident state verify that you have a resident insurance license that’s in good standing. Be aware, clearance letters often trigger your old state to cancel your license or put it on short notice, so you’ll want to make sure you have your ducks in a row before pursuing this.
In most states, if you validate that your insurance license is in good standing in your former resident state, you won’t have to take any additional education or training. There are exceptions to this, however, depending on whether both states are members of NAIC CE Reciprocity.
All states require processing fees for this exchange of licensure, with the notable exceptions of Montana and New Hampshire. Each state also has its own timeline, ranging from a day or two to 30 days, and only four states offer expedited processing, so, at the risk of sounding like a broken record, be sure to familiarize yourself with the local requirements.
Similar to the process of transferring your license to a new state, if you’re a nonresident insurance license holder in your new state, you’ll need to see if your new state has a simple process for verifying that your old residential insurance license is up-to-date using the NIPR’s PDB, or whether they require some sort of clearance letter to confirm. If you already hold a nonresident license, though, in many states, converting a nonresident license to a resident license is as simple as filling out an application on the state’s website.
There is no expedited process for converting a license in this way, but since you already have a license you’re using in that state, you shouldn’t experience a break in the process of writing business. That’s part of what makes the option of license conversion such an attractive one.
Some states will terminate the nonresident license and require that you reapply for a resident insurance license (even if you hold a nonresident license), although they generally give at least a 30 day grace period in which to complete that process. Be sure to budget a buffer for fees, as well, since some states charge for this process.
Since you already held a nonresident license in the state, there aren’t any hoops to jump through as far as state continuing education (CE) requirements. You’ll just need to figure out when your next CE renewal deadline is and how many credits you’ll need.
Also, if you’re moving from and to a state that recognizes NAIC CE insurance license reciprocity, most credits you acquired in your previous state should apply to whatever your new CE cycle is.
If you supplied a clearance letter to your new state, it may very well be that your previous state already terminated your insurance license or converted it to a nonresident license. If that’s the case, then boom, you’re done.
If that’s not the case, though, you’ll likely have to apply to terminate or convert your license to a nonresident license in your old state, and pay any accompanying fees. Plus, good news: Mississippi offers an expedited option for that process.
Checking the housing market, building connections, getting to know your neighbors, and any number of miscellaneous energy-sapping tasks will inevitably make moving a bear, but, with foresight and a little effort, insurance licensing changes don’t have to take up mental space for an interstate move.
For agencies, Managing General Agents (MGAs), and carriers whose agents might be going through this process, see how AgentSync can help via self-service portals and automatic syncs with the National Insurance Producer Registry.
