Licensing glossary
Producer licensing and appointment terms, defined plainly. Every term has its own page.
A
- ACA / FFM
- Affordable Care Act plans sold through the Federally Facilitated Marketplace. Producers selling these plans must complete separate FFM registration and training each plan year.
- Affiliation
- A producer's recorded relationship with an agency or business entity, distinct from carrier appointments. A producer can be affiliated with more than one agency.
- AHIP
- America's Health Insurance Plans certification. An annual training and exam many carriers require before a producer can sell Medicare Advantage or Part D products for that carrier.
- Appointment
- A formal appointment relationship a carrier files with a state authorizing a licensed producer to sell that carrier's products. A producer can be licensed without being appointed with a given carrier.
C
- Carrier contracting
- The process of establishing an agreement between a producer or agency and a carrier, covering commission terms and product access, that must be completed before appointments can be filed. See contracting.
- CE
- Continuing Education. Coursework producers must complete on a recurring schedule, set by each state, to keep a license active.
D
- DRLP
- Designated Responsible Licensed Producer: the licensed person an agency names on its business entity license as responsible for its compliance with state law.
E
- E&O
- Errors and Omissions insurance. Liability coverage many carriers and states require producers to carry before they can be licensed, appointed, or contracted.
F
- FMO / IMO / NMO
- Field, Independent, and National Marketing Organizations. Organizations that recruit, contract, and manage networks of independent insurance producers on behalf of carriers, typically in Medicare and life insurance distribution.
J
- Just-in-time appointment
- A carrier appointment filed only at the point of sale, rather than in advance, common in states and product lines that allow it to reduce appointment fees for producers who sell infrequently.
L
- LOA
- Line of Authority. The category of insurance a license permits a producer to sell, such as life, health, property, or casualty.
M
- Medicare Advantage
- A private insurance alternative to Original Medicare, sold by carriers and subject to its own certification (including AHIP) and appointment requirements each plan year.
- MGA
- Managing General Agent. An entity a carrier gives underwriting authority to, often managing a network of producers and appointments on the carrier's behalf.
N
- NIPR
- National Insurance Producer Registry. The NAIC-affiliated nonprofit that runs the Producer Database and electronic licensing and appointment filings.
- Non-resident license
- An insurance license issued by a state other than a producer's home state, allowing them to sell in that state without living there.
- NPN
- National Producer Number. A unique identifier assigned by NIPR to every licensed insurance producer, used to look up and track licenses and appointments across states.
P
R
- Ready-to-sell
- The status of a producer who holds an active license, an active appointment, and any required certifications for a given state and carrier, meaning they can legally sell that product there.
- Reciprocity
- An agreement between states that lets a producer licensed in their resident state obtain a non-resident license elsewhere with reduced requirements, such as skipping a state exam.
- Resident license
- An insurance license issued by a producer's home state, based on where they legally reside or maintain their principal place of business.
S
- Surplus lines
- Insurance placed with carriers not licensed in a given state, used to cover risks the standard market won't. Producers typically need a separate surplus lines license to place this business.
T
- Termination
- The end of a producer's appointment with a carrier, filed with the state. Terminations can be voluntary or for cause and may affect a producer's standing with other carriers.
U
- Upline / downline
- Upline refers to the FMO, IMO, NMO, or agency a producer is contracted under; downline refers to the producers and sub-agencies contracted beneath an organization in a distribution hierarchy.