Becoming An Insurance Broker: California Requirements And Steps

If you're considering a career as an insurance broker in California, there are several steps you need to take to obtain your license and start practising. Here's an overview of the process to help you get started:

Pick a specialism

The first step to becoming an insurance broker in California is to choose a specialism. There are several types of insurance broker licenses available in California, each requiring a different license. The most common insurance broker license specialties are:

• Accident and health insurance
• Automobile insurance
• Casualty and life insurance
• Personal property insurance

It is possible to specialize in more than one type of insurance by taking a combination course. For example, you could become a broker-agent acting as a captive agent, representing a single insurer or fleet of insurers. Alternatively, you could become an independent insurance salesperson, searching the marketplace for the best coverage for clients, or an independent agent representing different insurance companies.

Once you have chosen your specialism, you will need to take a pre-licensing course. The state of California requires 32 hours of pre-licensing education, which includes 12 hours of education in ethics and California insurance codes, and 20 hours of specialised education in your chosen field. If you want to specialize in more than one field, you can take a 40-hour course that covers two fields.

Meet California's minimum requirements

To become an insurance broker in California, you must meet the state's minimum requirements before applying for your licensing exam. Here is a detailed breakdown of these requirements:

Age

You must be 18 years or older at the time of the licensing exam.

Education

You must complete pre-licensing education or meet the minimum educational requirements. The state of California requires 32 hours of pre-licensing education, including 12 hours of education in ethics and California insurance codes and 20 hours of specialised education in your chosen insurance field. Alternatively, you can take a 40-hour course that covers a combination of two fields if you wish to specialise in more than one type of insurance.

Criminal History

Applicants must not have a criminal history and must pass a background check for insurance fraud or other insurance-related crimes and misconduct.

Residency

You must live in the state of California and provide proof of residence.

Fingerprints

You must submit your fingerprints to the California Department of Insurance (CDI). This can be done before or after your licensing exam, but doing it beforehand may expedite the process. You can either get fingerprinted at the testing site before the exam or submit your fingerprints ahead of time through a fingerprinting vendor approved by the California Department of Justice.

Meeting these minimum requirements is the first step towards becoming a licensed insurance broker in California. It is important to ensure that you fulfil these criteria before proceeding with the next steps, which include completing pre-licensing education, taking the licensing exam, and applying for your insurance broker license.

Complete pre-licensing education

To become an insurance broker in California, you must complete pre-licensing education. This is to ensure that you are proficient in insurance policies, laws and ethics. The state of California requires 32 hours of pre-licensing education, which can be completed online or in a classroom.

The pre-licensing education is broken down into two parts:

• 12 hours of education in ethics and California insurance codes. This is a one-time course that new brokers and brokers licensed in another state need to complete.
• 20 hours of specialised education in your chosen insurance field. This can include life insurance, accident and health insurance, property insurance, casualty insurance, or personal lines insurance. If you wish to specialise in more than one field, you can take a 40-hour course that covers a combination of two fields.

Once you have completed the pre-licensing education, you can then take the California licensing exam. This tests your proficiency in California insurance codes, ethics, and specific insurance practices for your chosen specialisation.

Take the California licensing exam

Once you have completed the prerequisites, you can take the California insurance licensing examination. This exam tests your proficiency in California insurance codes, ethics, and specific insurance practices for each type of insurance. You can take the exam online via PSI Exams or in person. If you opt for an in-person exam, arrive at least 30 minutes early to the examination site and bring a valid form of state or government-issued identification, such as a passport, passport card, employment authorization card, or permanent resident card. The exam is computer-based and consists of between 60 and 150 questions, depending on the type of exam. For example, the exam for accident and health insurance consists of 75 questions, and you are allowed one and a half hours for completion.

The Candidate Information Bulletin provides information on how to prepare for the exam, examination site procedures, sample exam questions, and test-taking strategies. It also includes driving directions to test centers. The examination fee is $50 if scheduled at a California Department of Insurance examination site (located in Los Angeles, Sacramento, and San Francisco) or $83 at a PSI examination site.

To cancel or reschedule your examination without forfeiting your fee, you must do so at least 48 hours in advance. If you fail to appear for your exam and wish to reschedule, a rescheduling fee will be charged.

Apply for an insurance license

Once you have passed your licensing exam, you can apply for your insurance broker license. The application process can be completed through California's online licensing application system, FLASH. You will need to provide basic personal information, such as your full name and current address, as well as information about your work history and experience. You will also need to submit your fingerprints and pass a background check. The application requires a fee, which varies depending on your specialty. For most specialties, the fee is $170, while for Bail Agents, it is $566.

After submitting your application, you will need to wait for approval from the California Department of Insurance (CDI). Once approved, you will receive your license, and you can begin working as an insurance broker in California.

It is important to note that maintaining your license requires continuing education. The number of hours required depends on your specialty, but it is generally between 20 and 24 hours per two-year license renewal cycle. Additionally, certain specialties, such as long-term care and annuities, require an additional eight-hour course.

Before you can act as an insurance agent, you must submit additional forms, which vary depending on your specialty. For example, if you specialize in property, personal, or casualty insurance, you must submit a $10,000 Bond of Insurance Broker (form LIC 417-5) or an Action Notice of Appointment from a sponsoring insurance company. On the other hand, if you specialize in life, accident, health, or auto insurance, you will need an appointment from an insurance company or the sponsorship of an agency.

Make sure to familiarize yourself with the specific requirements for your chosen specialty to ensure you have submitted all the necessary forms and documentation.

Frequently asked questions