State RegulationsPA specificDifficulty 2/5
An insurer contracts with a firm to serve as its exclusive general agent for a Pennsylvania territory, and the firm's managers will negotiate agency relationships and supervise licensed sellers. What does Pennsylvania law require before the firm performs that role?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Acting as a manager or exclusive general agent is a licensed activity in Pennsylvania under 40 P.S. § 310.31. A firm engaged to negotiate and supervise insurance transactions on an insurer's behalf must hold the required producer licensing before it steps into the role — the insurer's own authority does not flow down to it. This keeps every layer of the distribution chain inside the Pennsylvania Insurance Department's regulatory reach.
Why the other options are wrong
- A) The insurer's authority is its own; 40 P.S. § 310.31 imposes separate licensing duties on the manager or exclusive general agent.
- C) Customer registration is no part of Pennsylvania law; the requirement is producer licensing for the firm itself.
- D) An insurer's certificate of authority authorizes the insurer's business, not the unlicensed intermediary work of its general agent.
Memory hook
A general agent borrows nothing from the insurer's license — the firm gets its own.