Before a producer may sell, solicit, or negotiate insurance for an insurer, the producer must have a(n) ?

• A. Agency license
• B. Appointment
• C. Surety bond
• D. Certification of residency

Answer: (B)

Having an appointment is what authorizes a producer to represent a specific insurer. The appointment is the formal agreement the insurer gives the producer to sell, solicit, or negotiate that insurer’s policies. While a license lets you operate as a producer in general, it doesn’t by itself authorize you to transact business for a particular company. The appointment creates the agency relationship, enables the insurer to supervise the producer’s activities, and is the basis for commissions. Appointments are filed with the state and can be terminated, after which the producer can no longer transact for that insurer. Options like a surety bond or residency certification aren’t what confer the authority to represent a specific insurer.