This question came up when I was asked by a caller to the Free Legal Service Program that I operate for IIAG members (click here for an explanation of the program) if an agency employee who accepts premium payments and handles claims had to have a subagent’s license. To begin with, since a subagent is defined by the Georgia Insurance Code as “any licensed agent”, the same rules that apply to agents also apply to subagents. Under the Code, an agent is a person “who sells, solicits, or negotiates insurance.” In addition, the Code prohibits the payment of all or part of a commission received for the placing of an insurance policy to anyone who is not properly licensed by the Insurance Commissioner’s Office.
Therefore, if the tasks being performed by a person do not involve the sale, solicitation, or negotiation of an insurance policy or other coverage and that person is not being paid all or part of a commission received for the placing of such coverage, that person does not have to be licensed as an agent or subagent to perform that task. The Insurance Code helps answer the question of what tasks can be done by an agency employee who does not have a license by specifically exempting from its licensing requirements the performance of the following tasks: (i) executive, administrative, managerial, clerical, or a combination of these, that are only indirectly related to the sale, solicitation, or negotiation of insurance; (ii) underwriting, loss control, inspection, or the processing, adjusting, investigating, or settling of a claim on a contract of insurance; or (iii) acting in the capacity of a special agent or agency supervisor assisting insurance agents 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.
From the above, it is clear that a CSR or any other agency employee can handle claims without having to be licensed. The acceptance of premium payments is a closer question, as you can’t have a sale of insurance without the payment of a premium, but if taken to its logical conclusion, this would require that a licensed agent open any mail that may contain a premium payment, which is not practical. I told the caller that an unlicensed person should not be sent out of the agency’s office to pick up a premium payment from a customer, but I didn’t think the Insurance Commissioner’s Office would be upset by the fact that an unlicensed person opened the agency’s mail, which may contain a premium payment, or accepted a check from a customer who had come into the office to make such a payment, as long as that was all that happened.
Those agencies whose CSR’s are expected to be the primary point of contact with a customer regarding the renewal of an existing insurance policy or who want to provide an incentive to their CSR’s by giving them a bonus based on the amount of commissions received by the agency on business handled by the CSR should strongly consider having their CSR’s obtain the appropriate license from the Insurance Commissioner’s Office.