Who Can Be The Owner Of An Insurance Agency?

Over the Holidays, I received a couple of calls on the Free Legal Service program I operate for the members of the Independent Insurance Agents of Georgia that were about some basic issues involved in conducting the business activities of a Georgia insurance agency.  I will address the issues raised by one caller’s question in this post and the issues raised by the other caller’s question in a later post.  The first caller asked whether a person had to have an insurance agent’s license to be the owner of an insurance agency.  The answer to that question is No.

In fact, it is possible under the Georgia Insurance Code that none of the owners of an insurance agency have an insurance agent’s license.  That Code only requires those persons associated with an insurance agency who “sell, solicit, or negotiate insurance contracts” to have such a license or that of a limited subagent or counselor.  As long as an owner of the agency does not take part in the sale, solicitation, or negotiation of an insurance contract, as those terms are defined in the Code, the owner is not required to be licensed in any way by the Insurance Commissioner’s Office.  However, such an owner’s name, date of birth, social security number, and residence address must be provided to that Office to obtain a license for the agency.  For some reason, the same information must also be provided for each officer and director of an agency who does not have a license issued by that Office.

Under the Georgia Insurance Code, the only prohibition on who can be an owner of an insurance agency involves a person who has had a license refused, revoked, or suspended by the Insurance Commissioner’s Office.  Even then, if the agency is a corporation, such a person could be an owner of the agency, as long as they did not own 10 percent or more of its issued and outstanding stock.  However, such a person could not be an officer or director of the agency under any circumstances.  This Code section does not refer to limited liability companies, so it is unclear whether a person who has had a license refused, revoked, or suspended by the Insurance Commissioner’s Office could be a less than 10 percent owner of an insurance agency that is organized as a limited liability company.