A California life agent's license authorizes the agent to transact:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under Section 1626 of the California Insurance Code, a life agent is a person authorized to solicit, negotiate, or effect contracts of life insurance on behalf of an insurer. The life agent's license covers life insurance products and annuities, because annuities are classified as life insurance products in California. Before selling annuities, however, the agent must complete the annuity-specific training required by Section 1749.8. The life license does not authorize the agent to transact other lines of business: property and casualty insurance, and accident and health insurance, each require a separate license classification. An agent who holds only a life license must confine its activities to life insurance and annuities and refer clients to appropriately licensed producers for other lines.
Why the other options are wrong
- B) Property and casualty insurance requires a separate property-casualty agent license, and the life license does not cover it. Each line of authority is granted by a distinct license classification, and transacting business outside the authorized line is unlawful.
- C) A life agent may sell all forms of life insurance and annuities, not merely term life insurance policies. The life license covers whole life, term, universal, and other forms of life coverage as well as annuity products.
- D) Accident and health insurance is a separate license class in California. A life-only agent is not authorized to transact accident and health coverage; an agent who wishes to sell health products must obtain the appropriate additional license.
Memory hook
A life license covers life policies plus annuities, nothing else.