A business entity wishing to act as an insurance producer MUST

• A. Obtain a corporate charter
• B. Obtain a producer's license
• C. Register with the state treasury
• D. Purchase errors and omissions insurance

Answer: (B)

To act as an insurance producer, a business entity must obtain a producer’s license from the state. That license is the official permission to solicit, negotiate, and sell insurance, and it ensures the entity and its representatives meet state standards, including qualifications and ongoing education. Simply having a corporate charter creates the legal business entity, but it does not authorize the entity to transact insurance. Registering with the state treasury isn’t the mechanism by which you gain authority to sell insurance. And while having errors and omissions insurance is prudent protection, it is not a licensing requirement to operate as a producer.