State RegulationsNJ specificDifficulty 2/5
An out-of-state resident wants to sell life insurance to New Jersey consumers. Who has jurisdiction to require and issue the license he must hold before selling?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
The New Jersey Department of Banking and Insurance has jurisdiction over the business of insurance conducted within the state. A producer who sells insurance to New Jersey consumers must satisfy New Jersey's licensing requirements — prelicensing education, examination, and application under the producer licensing framework of N.J.S.A. 17:22A-1 et seq. — unless a reciprocity waiver applies. Residency in another state does not exempt an applicant; it is the location of the insurance business that fixes the regulator.
Why the other options are wrong
- A) Insurance regulation is primarily a state function; selling across state lines does not shift producer licensing to the federal government.
- B) A home-state license does not authorize selling in New Jersey; the producer must still satisfy New Jersey's licensing requirements or qualify for reciprocity.
- D) Nonresidents who sell insurance in the state are squarely within the department's licensing jurisdiction.
Memory hook
Sell in New Jersey, answer to New Jersey — the business location picks the regulator.