This guide provides information for insurance agents to help their customers obtain a North Carolina Insurance Broker bond
At a Glance:
- Lowest Cost: $50 per year or $5 per month
- Bond Amount: $15,000
- Who Needs it: All insurance brokers operating in North Carolina
- Purpose: To ensure the public will receive compensation for financial harm if the broker violates licensing law
- Who Regulates Insurance Brokers in North Carolina: The North Carolina Department of Insurance
Background
North Carolina statute 58-33-26 requires all insurance brokers operating in the state to obtain a license with the Department of Insurance. The North Carolina legislature enacted the licensing requirement to ensure that brokers engage in ethical business practices. To provide financial security for the enforcement of the licensing law, insurance brokers must purchase and maintain a $15,000 surety bond to be eligible for licensure.
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What is the Purpose of the North Carolina Insurance Broker Bond?
North Carolina requires insurance brokers to purchase a surety bond as part of the application process to obtain a business license. The bond ensures that the public will receive compensation for financial harm if the broker fails to abide by the regulations outlined in North Carolina Statute 58-33-30. Specifically, the bond protects the public if the broker engages in any acts of fraud or breaches contracts made with consumers. In short, the bond is a type of insurance that protects the public if the insurance broker violates licensing law.
How Can an Insurance Agent Obtain a North Carolina Insurance Broker Surety Bond?
BondExchange makes obtaining a North Carolina Insurance Broker bond easy. Simply log in to your account and use our keyword search to find the “broker” bond in our database. Don’t have a login? Gain access now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone at (800) 438-1162, email, or chat from 7:30 AM to 7:00 PM EST to assist you.
At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.
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Is a Credit Check Required for the North Carolina Insurance Broker Bond?
No, a credit check is not required for the North Carolina Insurance Broker bond. Because the bond is considered relatively low risk, the same low rate is offered to all insurance brokers in North Carolina regardless of their credit history.
How Much Does the North Carolina Insurance Broker Bond Cost?
The North Carolina Insurance Broker bond costs just $50 per year or $5 per month.
Who is Required to Purchase the Bond?
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North Carolina requires insurance brokers to purchase a surety bond as a prerequisite to obtaining a business license. To paraphrase North Carolina Statute 58-33-10, an insurance broker is a licensed insurance producer that obtains insurance coverage for his/her customer through an authorized agent of a carrier. To put it more simply, insurance brokers directly represent their clients and therefore obtain coverage through wholesales or managing general agents (MGAs) instead of directly through a carrier.
BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.
How do North Carolina Insurance Brokers Apply for a License?
Insurance brokers in North Carolina must navigate several steps to obtain a license. Below are the general guidelines, but applicants should refer to the NIPR’s licensing page for details on the process.
License Period – All North Carolina Insurance Broker Licenses expire on March 31 of each year and must be renewed before the expiration date
Step 1 – Obtain a Producer License
Applicants are required to become licensed insurance producers before obtaining their insurance broker license. To acquire an insurance producer license, applicants must complete the education requirements and then apply online through the NIPR. After the applicant has submitted their application, they will be contacted with instructions on how to schedule the required licensure exam. Additionally, a criminal background check and fingerprint check will be conducted on all license applicants.
For an overview of the licensure process, including a list of all applicable fees, applicants should refer to the Department of Insurance’s application checklist.
Step 2 – Complete the Application
Applicants may submit their broker license applications after obtaining their insurance producer license. All North Carolina Insurance Broker License applications should be submitted online through the NIPR. Brokers must complete the application in its entirety, and pay a $94 fee (plus an additional $50 per line of authority).
Step 3 – Purchase a Surety Bond
Insurance brokers must purchase and maintain a surety bond.
How Do North Carolina Insurance Brokers Renew Their Licenses?
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Insurance brokers in North Carolina can renew their licenses online here. Brokers must pay an $84 renewal fee. All North Carolina Insurance Broker Licenses expire on March 31 of each year and must be renewed before the expiration date. Brokers do not need to renew their producer licenses, however, they must complete 24 hours of continuing education (3 of which must be ethics) every two years for their license to remain in good standing.
What are the Insurance Requirements for Insurance Brokers in North Carolina?
North Carolina does not require insurance brokers to purchase any form of liability insurance as a prerequisite to obtaining a business license. Insurance brokers must purchase and maintain a $5,000 surety bond.
How Do North Carolina Insurance Brokers File Their Bonds?
Insurance brokers should mail their completed bond forms, including the power of attorney, to the following address:
NC Department of Insurance 1201 Mail Service Center Raleigh NC 27699-1201
The surety bond requires signatures from both the surety company that issues the bond and from the broker. The surety company should include the following information on the bond form:
- Legal name and address of entity/individual(s) buying the bond
- Surety company’s name and state of incorporation
- Bond amount
- Date the bond is signed
What Can North Carolina Insurance Brokers Do to Avoid Claims Against Their Bonds?
To avoid claims on their bonds, insurance brokers in North Carolina must follow all license regulations in the state, including some of the most important issues below that tend to cause claims:
- Do not engage in any acts of fraud or misrepresentation
- Do not breach any contracts made with consumers
What Other Insurance Products Can Agents Offer Insurance Brokers in North Carolina?
North Carolina does not require insurance brokers to purchase any form of liability insurance as a prerequisite to obtaining a business license. However, some brokers may obtain this insurance anyway. Bonds are our only business at BondExchange, so we do not issue any other types of insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.
How Can Insurance Agents Prospect for North Carolina Insurance Broker Customers?
North Carolina provides a public database to search for active insurance producers in the state. However, the database does allow users to filter the results to only include brokers. We suggest contacting the Department of Insurance directly for help securing a prospect list. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.
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