Act 312 of the 2016 Legislative Session requires the licensure of insurance consultants effective August 1, 2016. A consultant is defined as any person or entity which offers for a fee or other valuable consideration any advice, counsel, opinion, or related services to risk evaluation or management, the benefits, coverages, exclusions, or provisions under an insurance policy, or involving the advantages or disadvantages of an insurance policy, or any formal plan of managing risk.
Consultant licenses will be issued to both individuals and entities for the lines of Life, Health and Accident, Property, Casualty and/or Variable Contracts. A person can be licensed as both a producer and a consultant; however, a consultant who is also licensed as a producer may not sell, solicit or negotiate contracts of insurance and may not receive directly or indirectly any compensation for the sale of insurance coverages which were the subject of a consulting contract during the term of the consulting contract.
Individual resident applicants must complete prelicense education and pass a license examination. Resident individuals must also comply with fingerprinting requirements. Individuals who are already actively licensed as producers for the same line of business will be exempt from prelicense and exam requirements. Consultants must also comply with the same continuing education requirements that apply to producers.
Nonresident applicants must hold an equivalent license in their home state.
A person licensed as a consultant must enter into a written contract with a client prior to providing consulting services. The contract must contain the following disclosures:
- The services to be provided to the insured and prospective insureds.
- The beginning and ending date of the agreement.
- Any insurance to which the contract for consulting services applies.
- Arrangements for compensation, whether by flat rate, hourly rate or other valuable consideration.
- If the consultant is dually licensed as an insurance producer.
- If the consultant has any interest or affiliation with any insurance producer, broker or insurer involved within the scope of the consulting work.
The contract does not need to be submitted for approval prior use; however, it must be provided to the Department within 10 days upon written request.
The definition of "insurance consultant" does not include:
- Attorneys while working in the capacity of an attorney.
- Litigation support or insurance expert witness services related to litigated matters.
- Claims adjusters.
- Public adjusters, appraisers, contractors, or engineers engaged in the settlement of insurance claims, who do not have a direct or indirect financial interest in any aspect of the claim, other than the compensation established in the written contract with the insured.
- A licensed insurance producer who offers advice or consulting with respect to any of the following, regardless of whether the insurance producer is compensated by commission or agency fees for such advice, consulting, or services:
- Risk evaluation or management, risk transfer, self-insurance, self-insured retention programs.
- The benefits, coverages, exclusions, or provisions under any policy of insurance.
- The advantages or disadvantages of any policy of insurance or plan of managing risk.
- Any other advice, consulting, or related policyholder services in conjunction with risk and insurance programs provided as an insurance producer.
- Loss control and accident prevention consultants.
- Certified public accountants while working in their capacity as an accountant.
- Actuaries who are members of the American Academy of Actuaries.