State RegulationsTN specificDifficulty 2/5
Two experienced producers form a limited liability company to market insurance in Tennessee. Under the definitions of T.C.A. § 56-6-102, what licensing posture is correct?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
T.C.A. § 56-6-102 defines both the insurance producer and the business entity, and Tennessee's licensing architecture requires each to be licensed in its own capacity: the entity for engaging in the insurance business as a firm, the individuals for the producer activities of selling, soliciting, and negotiating. The Tennessee Department of Commerce & Insurance administers both tracks. An entity license does not substitute for individual licenses — the two requirements operate side by side.
Why the other options are wrong
- B) An entity license does not blanket-cover individuals; the producer definition attaches to the natural persons doing the selling.
- C) Tennessee expressly recognizes the business entity as a licensed participant in the insurance business under T.C.A. § 56-6-102.
- D) Licensure precedes activity; waiting until after the first policy is written leaves the unlicensed work in violation territory from the start.
Memory hook
The firm is licensed as a firm; each seller is licensed as a producer — both boxes, always.