A
Affiliation
A relationship between two entities, typically an insurance agency and an insurance carrier, where the agency represents and sells insurance products offered by the carrier.
Annuity
A financial product sold by insurance companies that provides a stream of income payments in exchange for a lump-sum payment or a series of payments.
C
Captive agent
An insurance agent who exclusively represents a single insurance carrier and sells only the products of that carrier.
Churning
The practice of an insurance agent or broker persuading a policyholder to cancel an existing insurance policy in order to purchase a new one, often to generate additional commissions.
Co-code (company code)
A unique, five-digit identification assigned by the NAIC to all insurance companies for filing financial data.
D
Designated home state
The state in which an insurance producer is primarily licensed and where they must comply with licensing requirements.
Detail report
A report providing comprehensive information on insurance transactions, policies, claims, and other relevant details.
Domicile
The state or jurisdiction where an insurance company is incorporated and maintains its legal headquarters.
DRLP (Designated Responsible Licensed Producer)
An individual appointed by an insurance agency or brokerage who is responsible for ensuring compliance with insurance regulations and overseeing the activities of other licensed producers.
E
E&O insurance (Errors and Omissions insurance)
Professional liability insurance that protects insurance agents, brokers, and agencies against claims of negligence or inadequate work.
E&S lines (Excess and Surplus)
The specialty market that insures difficult, novel, or higher risk things that many standard carriers do not cover. E&S companies are typically fast-moving and maintain flexibility to adapt to market changes.
Exclusive agent
An insurance agent who works exclusively for a single insurance carrier and is prohibited from selling products from other carriers.
F
FEIN (Federal Employer Identification Number)
A unique nine-digit number assigned by the Internal Revenue Service (IRS) to businesses for tax identification purposes.
FMO (Field Marketing Organization)
An entity that provides marketing, sales, and administrative support to insurance agents and agencies, typically specializing in specific insurance products or market segments.
I
Inactive licenses
Licenses held by insurance producers that are not currently active due to non-renewal, suspension, or other reasons.
Independent agencies
Insurance agencies that represent multiple insurance carriers and offer a variety of insurance products to consumers.
Insurance adjuster
A professional responsible for investigating insurance claims, determining the extent of coverage, and negotiating settlements with policyholders.
Insurance agency
A business that sells insurance products and services on behalf of one or more insurance carriers.
Insurance broker
A licensed intermediary who represents insurance buyers and assists them in purchasing insurance coverage from insurance carriers.
Insurance carrier
An insurance company that underwrites insurance policies and assumes the risk of loss in exchange for premiums.
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Insurance core lines
The primary types of insurance products offered by insurance carriers, such as property, casualty, life, health, and annuities.
Insurance producer
An individual or entity licensed to sell insurance products and services to consumers on behalf of insurance carriers.
J
Just-in-time appointment
An appointment process where an insurance producer is appointed by an insurance carrier immediately before completing a transaction, ensuring compliance with regulatory requirements.
L
Line of authority (LOA)
Authorization is granted to an insurance producer by a state insurance department to sell specific types of insurance products.
M
Major lines
The primary categories of insurance products, including property, casualty, life, health, and annuities.
MGA (Managing General Agent)
An independent entity with specialized expertise authorized by an insurance carrier to underwrite and manage insurance policies on behalf of the carrier. Many MGAs operate in the E&S or specialty lines market.
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MGU (Managing General Underwriter)
Similar to an MGA, an MGU is an entity that specializes in underwriting risks on behalf of insurance carriers.
N
NAIC (National Association of Insurance Commissioners)
An organization composed of insurance regulators from all 50 U.S. states, the District of Columbia, and five U.S. territories, responsible for developing model insurance laws and regulations.
NIPR (National Insurance Producer Registry)
A nonprofit organization that provides online services for insurance producers, including licensing and appointment applications.
NPN (National Producer Number)
A unique identifier assigned by the NIPR to insurance producers for licensing and regulatory purposes.
NPN lookup
A search tool provided by the NIPR to verify the licensing status and credentials of insurance producers using their National Producer Number.
P
Personal lines of insurance
Insurance products designed to cover the personal property and liability risks of individuals and families, such as auto, homeowners, and renters insurance.
Producer database (PDB)
A centralized database containing information about licensed insurance producers, maintained by state insurance departments or regulatory authorities.
R
Reinstatement period
The period during which an insurance policyholder can reinstate a lapsed insurance policy without reapplying for coverage, typically subject to certain conditions and requirements.
Reinsurance
The practice of insurance companies transferring a portion of their risk to other insurance companies, known as reinsurers, to mitigate their exposure to large losses.
Rebating in insurance
The illegal practice of offering customers something of value, such as cash or gifts, as an inducement to purchase an insurance policy.
Retaliatory fee
A fee imposed by a state on insurance companies domiciled in other states if those states impose higher fees or taxes on insurance companies domiciled within their jurisdiction.
S
Solvency
The financial ability of an insurance company to meet its obligations to policyholders by having sufficient assets to cover liabilities and claims.
SEC (Securities and Exchange Commission)
A U.S. government agency responsible for regulating the securities industry, including insurance products with investment components.