Producer Licensing Requirements

V.S.A. tit. 8, ch. 131, subch. 1A

in effect

8 V.S.A. § 4813 Purpose and scope

4813. Purpose and scope This subchapter governs the qualifications and procedures for the licensing of insurance producers. It simplifies and organizes some statutory language to improve efficiency, permits the use of new technology, and reduces costs associated with issuing and renewing insurance licenses. Added 2001, No. 97 (Adj. Sess.), § 18.

8 V.S.A. § 4813a Definitions

4813a. Definitions As used in this subchapter: (1) “Business entity” shall have the same meaning as in subdivision 4791(8) of this title. (2) “Home state” means the District of Columbia and any state or territory of the United States in which an insurance producer maintains his or her principal place of residence or principal place of business and is licensed to act as an insurance producer. (3) “Insurance producer” shall have the same meaning as in subdivision 4791(6) of this title. (4) “Insurer” means any person engaged in the business of insurance in this State. It shall include any individual, corporation, association, partnership, reciprocal exchange, interinsurer, Lloyds insurer, fraternal benefit society, and any other legal entity engaged in the business of insurance. The term includes entities formed or regulated under chapters 101, 103, 105, 107, 109, 111, 113, 121, 123, 125, 132, 137, 138, and 139 of this title. As used in this subchapter, “insurer” does not include entities formed under chapter 141 or 142 of this title. (5) “License” means a document issued by the Commissioner authorizing a person to act as an insurance producer for the lines of authority specified in the document. The license itself does not create any authority, actual, apparent, or inherent, in the holder to represent or commit an insurer. (6) “Limited lines insurance” means travel accident or travel baggage insurance, or any other line of insurance that the Commissioner deems necessary to recognize for the purposes of complying with subsection 4813h(d) of this subchapter, or any other line of insurance the Commissioner, by regulation, shall deem essential for the transaction of business in this State and that does not require the professional competency demanded for an insurance producer’s license. (7) “Limited lines producer” shall have the same meaning as in subdivision 4791(7) of this title. (8) “Negotiate” means the act of conferring directly with or offering advice directly to a purchaser or prospective purchaser of a particular contract of insurance concerning any of the substantive benefits, terms, or conditions of the contract, provided the person engaged in that act either sells insurance or obtains insurance from insurers for purchasers. (9) “Person” means an individual or a business entity. (10) “Portable electronics insurance” shall have the same meaning as in subdivision 4257(2) of this title. (11) “Portable electronics vendor” shall have the same meaning as in subdivision 4257(3) of this title. (12) “Sell” means to exchange a contract of insurance by any means, for money or its equivalent, on behalf of an insurer. (13) “Solicit” means attempting to sell insurance or asking or urging a person to apply for a particular kind of insurance from a particular insurer. (14) “Terminate” means the cancellation of the relationship between an insurance producer and the insurer or the termination of a producer’s authority to transact insurance. (15) “Uniform Application” means the current version of the NAIC Uniform Application for resident and nonresident producer licensing. (16) “Uniform Business Entity Application” means the current version of the NAIC Uniform Business Entity Application for resident and nonresident business entities. Added 2001, No. 97 (Adj. Sess.), § 18; amended 2005, No. 36, § 8, eff. June 1, 2005; 2011, No. 136 (Adj. Sess.), § 10, eff. May 18, 2012; 2015, No. 149 (Adj. Sess.), § 32.

8 V.S.A. § 4813b License required

4813b. License required A person shall not sell, solicit, or negotiate insurance in this State for any class or classes of insurance unless the person is licensed for that line of authority in accordance with this subchapter. Added 2001, No. 97 (Adj. Sess.), § 18.

8 V.S.A. § 4813c Duties

4813c. Duties (a) A person not duly licensed as an insurance producer or limited lines producer who sells, solicits, or negotiates insurance policies on behalf of an insurer shall be deemed a producer acting as the agent of such insurer within the intent of this subchapter, and shall be liable for all the duties, requirements, liabilities, and penalties to which an insurance producer or limited lines producer is subject, and the insurer, by compensating the person through any of its officers, agents, or employees for soliciting policies of insurance, shall accept and acknowledge that person as its agent in such a transaction. (b) A person not licensed as an insurance producer or limited lines producer who sells, solicits, or negotiates insurance on behalf of others or transmits for others an application for a policy of insurance to or from an insurer, or offers or assumes to act in the negotiations of insurance, shall be a producer within the intent of this subchapter, and shall be liable for all the duties, requirements, liabilities, and penalties to which licensed insurance producers or limited lines producers are subject. (c) Every insurance producer or limited lines producer acting as an agent of an insurer who sells, solicits, or negotiates insurance of any kind shall, in any controversy between the insured or his or her beneficiary and the insurer, be regarded as representing the insurer and not the insured or his or her beneficiary for whose acts the insurer will be responsible. (d) Every insurance producer or limited lines producer, not acting as the agent of an insurer, who sells, solicits, or negotiates insurance of any kind shall, in any controversy between the insured and his or her beneficiary and the insurer issuing any policy of insurance, be regarded as representing the insured or his or her beneficiary and not the insurer, except any insurer that directly or through its agents delivers in this State to any producer a policy or contract for insurance pursuant to the application or request of the producer, acting for an insured other than himself or herself, shall be deemed to have authorized the producer to receive on its behalf payment of any premium that is due on the policy, or contract for insurance at the time of its issuance or delivery. Added 2001, No. 97 (Adj. Sess.), § 18.

8 V.S.A. § 4813d Exceptions to licensing

4813d. Exceptions to licensing (a) Nothing in this subchapter shall be construed to require an insurer to obtain an insurance producer license. In this section, the term “insurer” does not include an insurer’s officers, directors, employees, subsidiaries, or affiliates. (b) A license as an insurance producer shall not be required of the following: (1) An officer, director, or employee of an insurer or of an insurance producer, provided the officer, director, or employee does not receive any commission on policies written or sold to insure risks residing, located, or to be performed in this State; and: (A) the officer, director, or employee’s activities are executive, administrative, managerial, clerical, or a combination of these, and are only indirectly related to the sale, solicitation, or negotiation of insurance; or (B) the officer, director, or employee’s function relates to underwriting, loss control, inspection, or the processing, adjusting, investigating, or settling of a claim on a contract of insurance; or (C) The officer, director, or employee is acting in the capacity of a special agent or agency supervisor assisting insurance producers where the person’s activities are limited to providing technical advice and assistance to licensed insurance producers and do not include the sale, solicitation, or negotiation of insurance; (2) A person who secures and furnishes information for the purpose of group life insurance, group property and casualty insurance, group annuities, group, or blanket accident and health insurance; or for the purpose of enrolling individuals under plans; issuing certificates under plans, or otherwise assisting in administering plans; or performs administrative services related to mass-marketed property and casualty insurance; where no commission is paid to the person for the service; (3) An employer or association or its officers, directors, employees, or the trustees of an employee trust plan, to the extent that the employers, officers, employees, directors, or trustees are engaged in the administration or operation of a program of employee benefits for the employer’s or association’s own employees or the employees of its subsidiaries or affiliates, which program involves the use of insurance issued by an insurer, as long as the employers, associations, officers, directors, employees, or trustees are not in any manner compensated, directly or indirectly, by the company issuing the contracts; (4) Employees of insurers or organizations employed by insurers who are engaging in the inspection, rating, or classification of risks, or in the supervision of the training of insurance producers and who are not individually engaged in the sale, solicitation, or negotiation of insurance; (5) A person whose activities in this State are limited to advertising without the intent to solicit insurance in this State through communications in printed publications or other forms of electronic mass media whose distribution is not limited to residents of the State, provided the person does not sell, solicit, or negotiate insurance that would insure risks residing, located, or to be performed in this State; (6) A person who is not a resident of this State who 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 insured under that contract, provided that person is otherwise licensed as an insurance producer to sell, solicit, or negotiate that insurance in the State where the insured maintains its principal place of business and the contract of insurance insures risks located in that state; or (7) A salaried full-time employee who counsels or advises his or her employer relative to the insurance interests of the employer or of the subsidiaries or business affiliates of the employer, provided the employee does not sell or solicit insurance or receive a commission. (8) A person selling or offering portable electronics insurance who is an employee or authorized representative of a portable electronics vendor licensed as a limited lines insurance producer to sell, solicit, or negotiate portable electronics insurance in accordance with rules adopted by the Commissioner pursuant to section 4261 of this title. Added 2001, No. 97 (Adj. Sess.), § 18; amended 2011, No. 136 (Adj. Sess.), § 11, eff. May 18, 2012.

8 V.S.A. § 4813e Application for examination

4813e. Application for examination A resident individual applying for an insurance producer license shall pass a written examination as set forth in subdivision 4800(3)(E) of this title unless exempt pursuant to section 4813i of this subchapter. Added 2001, No. 97 (Adj. Sess.), § 18.

8 V.S.A. § 4813f Application for license

4813f. Application for license (a) An individual applying for a resident insurance producer license shall make application to the Commissioner on the Uniform Application and declare under penalty of refusal, suspension, or revocation of the license that the statements made in the application are true, correct, and complete to the best of the individual’s knowledge and belief. Before approving the application, the Commissioner shall find that the individual: (1) is at least 18 years of age; (2) has not committed any act that is a ground for denial, suspension, or revocation set forth in section 4804 of this title; (3) is competent, trustworthy, financially responsible, and of good personal and business reputation; (4) has paid the fees set forth in section 4800 of this title; and (5) has successfully passed the examinations for the lines of authority for which the person has applied. (b) As soon as practicable, but no later than April 1, 2003, the Commissioner shall permit a business entity to be licensed as an insurance producer. Application shall be made using the Uniform Business Entity Application. Except as permitted by regulation, licensure of a business entity shall not relieve any natural person who sells, solicits, or negotiates insurance of the requirement to be licensed under this chapter. Before approving the application, the Commissioner shall find that: (1) The business entity has paid the fees set forth in section 4800 of this title. (2) The business entity has designated a licensed producer who is a natural person responsible for the business entity’s compliance with the insurance laws, rules, and regulations of this State. (c) The Commissioner may require any documents reasonably necessary to verify the information contained in an application. Added 2001, No. 97 (Adj. Sess.), § 18.

8 V.S.A. § 4813g License

4813g. License (a) An insurance producer may receive qualification for a license and an appointment in one or more of the following lines of authority: (1) Life: insurance coverage on human lives, including benefits of endowment and annuities, and may include benefits in the event of death or dismemberment by accident and benefits for disability income. (2) Accident and health or sickness: insurance coverage for sickness, bodily injury, or accidental death, and may include benefits for disability income. (3) Property: insurance coverage for the direct or consequential loss or damage to property of every kind. (4) Casualty: insurance coverage against legal liability, including that for death, injury, or disability or damage to real or personal property. (5) Variable life and variable annuity products: insurance coverage provided under variable life insurance contracts and variable annuities. (6) Personal lines: property and casualty insurance coverage sold to individuals and families for primarily noncommercial purposes. (7) Any other line of insurance permitted under State laws or regulations. (b) An insurance producer license shall remain in effect unless revoked or suspended as long as the fee set forth in section 4800 of this title is paid and education requirements for resident individual producers are met by the due date. (c) A licensed insurance producer who is unable to comply with license renewal procedures due to military service or some other extenuating circumstance (for example, including a long-term medical disability) may request a waiver of those procedures. The producer may also request a waiver of any examination requirement or any other fine or sanction imposed for failure to comply with renewal procedures. (d) [Repealed.] Added 2001, No. 97 (Adj. Sess.), § 18; amended 2009, No. 137 (Adj. Sess.), § 9.

8 V.S.A. § 4813h Nonresident licensing

4813h. Nonresident licensing (a) Unless denied licensure pursuant to section 4804 of this title, a nonresident person shall receive a nonresident producer license if: (1) the person is currently licensed as a resident and in good standing in his or her home state; (2) the person has submitted the proper request for licensure and has paid the fees required by section 4800 of this title; (3) the person has submitted or transmitted to the Commissioner the application for licensure that the person submitted to his or her home state, or in lieu of the same, a completed Uniform Application; and (4) the person’s home state awards nonresident producer licenses to residents of this State on the same basis. (b) The Commissioner may verify the producer’s licensing status through the producer database maintained by the National Association of Insurance Commissioners, its affiliates or subsidiaries. (c) A nonresident producer who moves from one state to another state or a resident producer who moves from this State to another state shall file a change of address and provide certification from the new resident state within 30 days of the change of legal residence. No fee or license application is required. (d) Notwithstanding any other provision of this chapter, the Commissioner may allow a person licensed as a limited lines producer in his or her home state to receive a nonresident limited lines producer license, pursuant to subsection (a) of this section, granting the same scope of authority as granted under the license issued by the producer’s home state. For the purposes of this section, limited lines insurance is any authority granted by the home state that restricts the authority of the license to less than the total authority prescribed in the associated major lines pursuant to subdivisions 4813g(a)(1) through (6) of this subchapter. Added 2001, No. 97 (Adj. Sess.), § 18.

8 V.S.A. § 4813i Exemption from examination

4813i. Exemption from examination (a) An individual who applies for an insurance producer license in this State who was previously licensed for the same lines of authority in another state shall not be required to complete any prelicensing education or examination. This exemption is only available if the person is currently licensed in that state or if the application is received within 90 days of the cancellation of the applicant’s previous license and if the prior state issues a certification that, at the time of cancellation, the applicant was in good standing in that state or the state’s producer database records, maintained by the National Association of Insurance Commissioners, its affiliates or subsidiaries, indicate that the producer is or was licensed in good standing for the line of authority requested. (b) A person licensed as an insurance producer in another state who moves to this State shall make application within 90 days of establishing legal residence to become a resident licensee pursuant to section 4813f of this subchapter. No prelicensing education or examination shall be required of that person to obtain any line of authority previously held in the prior state except where the Commissioner determines otherwise by regulation. (c) A person who applies for a limited lines travel insurance producer license under chapter 148 of this title shall not be required to be examined by the Commissioner. (d), (e) [Repealed.] (f) At the discretion of the Commissioner, a limited lines producer may be exempt from examination. Added 2001, No. 97 (Adj. Sess.), § 18; amended 2009, No. 137 (Adj. Sess.), § 12; 2021, No. 139 (Adj. Sess.), § 11, eff. Aug. 25, 2022.

8 V.S.A. § 4813j Assumed names

4813j. Assumed names An insurance producer doing business under any name other than the producer’s legal name is required to notify the Commissioner prior to using the assumed name. Added 2001, No. 97 (Adj. Sess.), § 18.

8 V.S.A. § 4813k Temporary licensing

4813k. Temporary licensing (a) The Commissioner may issue a temporary insurance producer license for a period not to exceed 180 days without requiring an examination if the Commissioner deems that the temporary license is necessary for the servicing of an insurance business in the following cases: (1) to the surviving spouse or court-appointed personal representative of a licensed insurance producer who dies or becomes mentally or physically disabled to allow adequate time for the sale of the insurance business owned by the producer or for the recovery or return of the producer to the business or to provide for the training and licensing of new personnel to operate the producer’s business; (2) to a member or employee of a business entity licensed as an insurance producer, upon the death or disability of an individual designated in the business entity application or license; (3) to the designee of a licensed insurance producer entering active service in the Armed Forces of the United States of America; or (4) in any other circumstance where the Commissioner deems that the public interest will best be served by the issuance of this license. (b) The Commissioner may, by order, limit the authority of any temporary licensee in any way deemed necessary to protect insureds and the public. The Commissioner may require the temporary licensee to have a suitable sponsor who is a licensed producer or insurer and who assumes responsibility for all acts of the temporary licensee and may impose other similar requirements designed to protect insureds and the public. The Commissioner may, by order, revoke a temporary license if the interest of insureds or the public is endangered. A temporary license may not continue after the owner or the personal representative disposes of the business. Added 2001, No. 97 (Adj. Sess.), § 18.

8 V.S.A. § 4813l Appointments

4813l. Appointments (a) An insurance producer or limited lines producer shall not act as an agent of an insurer unless the producer becomes an appointed agent of that insurer. A producer who is not acting as an agent of an insurer is not required to become appointed. (b) An appointment shall be made by an insurer designating an insurance producer or limited lines producer as an agent of the insurer for the lines of insurance the producer will be authorized to sell, solicit, or negotiate for the insurer. (c) As set forth in section 4813g of this subchapter, an insurer shall make a separate appointment for each line of insurance for which an insurance producer or limited lines producer will be acting as an agent of the insurer. (d) To appoint a producer as its agent, the appointing insurer shall file, in a format approved by the Commissioner, a notice of appointment within 15 days from the date the agency contract is executed or the first insurance application is submitted, whichever is sooner. (e) An insurer shall pay an appointment fee, in the amount and method of payment set forth in section 4800 of this title, for each insurance producer appointed by the insurer and for each line of insurance in which a producer is qualified. (f) An insurer shall remit, in a manner prescribed by the Commissioner, a renewal appointment fee in the amount set forth in section 4800 of this title. (g) As soon as practicable, the Commissioner shall permit an insurer to appoint a producer to all or some insurers within the insurer’s holding company system or group by the filing of a single appointment request. Added 2001, No. 97 (Adj. Sess.), § 18.

8 V.S.A. § 4813m Notification to Commissioner of termination

4813m. Notification to Commissioner of termination (a) Termination for cause. An insurer or authorized representative of the insurer that terminates the appointment, employment, contract, or other insurance business relationship with a producer shall notify the Commissioner within 30 days following the effective date of the termination, using a format prescribed by the Commissioner, if the reason for termination is one of the reasons set forth in section 4804 of this title or the insurer has knowledge the producer was found by a court, government body, or self-regulatory organization authorized by law to have engaged in any of the activities in section 4804 of this title. Upon the written request of the Commissioner, the insurer shall provide additional information, documents, records, or other data pertaining to the termination or activity of the producer. (b) Termination without cause. An insurer or authorized representative of the insurer that terminates the appointment, employment, or contract with a producer for any reason not set forth in section 4804 of this title shall notify the Commissioner within 30 days following the effective date of the termination, using a format prescribed by the Commissioner. Upon written request of the Commissioner, the insurer shall provide additional information, documents, records, or other data pertaining to the termination. (c) Ongoing notification requirement. The insurer or the authorized representative of the insurer shall promptly notify the Commissioner in a format acceptable to the Commissioner if, upon further review or investigation, the insurer discovers additional information that would have been reportable to the Commissioner in accordance with subsection (a) of this section had the insurer then known of its existence. (d) Copy of notification to be provided to producer. (1) Within 15 days after making the notification required by subsections (a), (b), and (c) of this section, the insurer shall mail a copy of the notification to the producer at his or her last known address. If the producer is terminated for cause for any of the reasons listed in section 4804 of this title, the insurer shall provide a copy of the notification to the producer at his or her last known address by certified mail, return receipt requested, postage prepaid or by overnight delivery using a nationally recognized carrier. (2) Within 30 days after the producer has received the original or additional notification, the producer may file written comments concerning the substance of the notification with the Commissioner. The producer shall, by the same means, simultaneously send a copy of the comments to the reporting insurer, and the comments shall become a part of the Commissioner’s file and accompany every copy of a report distributed or disclosed for any reason about the producer as permitted under subsection (f) of this section. (e) Immunities. (1) In the absence of actual malice, an insurer, the authorized representative of the insurer, a producer, the Commissioner, or an organization of which the Commissioner is a member and that compiles the information and makes it available to other commissioners or regulatory or law enforcement agencies shall not be subject to civil liability, and a civil cause of action of any nature shall not arise against these entities or their respective agents or employees, as a result of any statement or information required by or provided pursuant to this section or any information relating to any statement that may be requested in writing by the Commissioner from an insurer or producer, or a statement by a terminating insurer or producer to an insurer or producer limited solely and exclusively to whether a termination for cause under subsection (a) of this section was reported to the Commissioner, provided the propriety of any termination for cause under subsection (a) of this section is certified in writing by an officer or authorized representative of the insurer or producer terminating the relationship. (2) In any action brought against a person that may have immunity under subdivision (1) of this subsection for making any statement required by this section or providing any information relating to any statement that may be requested by the Commissioner, the party bringing the action shall plead specifically in any allegation that subdivision (1) of this subsection does not apply because the person making the statement or providing the information did so with actual malice. (3) Subdivision (1) or (2) of this subsection shall not abrogate or modify any existing statutory or common law privileges or immunities. (f) Confidentiality. (1) Any documents, materials, or other information in the control or possession of the Department of Financial Regulation that is furnished by an insurer, producer, or an employee or agent thereof acting on behalf of the insurer or producer, or obtained by the Commissioner in an investigation pursuant to this section shall be confidential by law and privileged, shall not be subject to 1 V.S.A. chapter 5, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. However, the Commissioner is authorized to use the documents, materials, or other information in the furtherance of any regulatory or legal action brought as a part of the Commissioner’s duties. (2) Neither the Commissioner nor any person who received documents, materials, or other information while acting under the authority of the Commissioner shall be permitted or required to testify in any private civil action concerning any confidential documents, materials, or information subject to subdivision (1) of this subsection. (3) In order to assist in the performance of the Commissioner’s duties under this chapter, the Commissioner may: (A) share documents, materials, or other information, including the confidential and privileged documents, materials, or information subject to subdivision (1) of this subsection, with other state, federal, and international regulatory agencies, with the National Association of Insurance Commissioners, its affiliates or subsidiaries, and with state, federal, and international law enforcement authorities, provided the recipient agrees to maintain the confidentiality and privileged status of the document, material, or other information; (B) receive documents, materials, or information, including otherwise confidential and privileged documents, materials, or information, from the National Association of Insurance Commissioners, its affiliates or subsidiaries, and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material, or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or information; and (C) enter into agreements governing sharing and use of information consistent with this subsection. (4) No waiver of any applicable privilege or claim of confidentiality in the documents, materials, or information shall occur as a result of disclosure to the Commissioner under this section or as a result of sharing as authorized in subdivision (3) of this subsection. (5) Nothing in this act shall prohibit the Commissioner from releasing final, adjudicated actions, including for cause terminations that are open to public inspection pursuant to 1 V.S.A. chapter 5 to a database or other clearinghouse service maintained by the National Association of Insurance Commissioners, its affiliates or subsidiaries. (g) Penalties for failing to report. An insurer, the authorized representative of the insurer, or producer that fails to report as required under the provisions of this section or that is found to have reported with actual malice by a court of competent jurisdiction may, after notice and hearing, have its license or certificate of authority suspended or revoked and may be assessed an administrative penalty of $10,000.00. Added 2001, No. 97 (Adj. Sess.), § 18; amended 2011, No. 78 (Adj. Sess.), § 2, eff. April 2, 2012.

8 V.S.A. § 4813n Reciprocity

4813n. Reciprocity (a) The Commissioner shall waive any requirements for a nonresident license applicant with a valid license from his or her home state, except the requirements imposed by section 4813g of this chapter, if the applicant’s home state awards nonresident licenses to residents of this State on the same basis. (b) A nonresident producer’s satisfaction of his or her home state’s continuing education requirements for licensed insurance producers shall constitute satisfaction of this State’s continuing education requirements if the nonresident producer’s home state recognizes the satisfaction of its continuing education requirements imposed upon producers from this State on the same basis. Added 2001, No. 97 (Adj. Sess.), § 18.

8 V.S.A. § 4813o Reporting of actions

4813o. Reporting of actions (a) A producer shall report to the Commissioner any administrative action taken against the producer in another jurisdiction or by another governmental agency in this state within 30 days of the final disposition of the matter. This report shall include a copy of the order, consent to order, or other relevant legal documents. (b) Within 30 days of the initial pretrial hearing date, a producer shall report to the Commissioner any criminal prosecution of the producer taken in any jurisdiction. The report shall include a copy of the initial complaint filed, the order resulting from the hearing, and any other relevant legal documents. Added 2001, No. 97 (Adj. Sess.), § 18.

Source: Vermont General Assembly (legislature.vermont.gov)URL: https://legislature.vermont.gov/statutes/chapter/08/131Fetched: 10/21/2026