Writing Health Insurance with a P&C License

One of the questions we receive fairly often concerns the authority of 2-20 general lines agents to sell health insurance. More specifically, the questions concern the issuance by the Department of Financial Services (DFS) of 2-40 health licenses to 2-20 agents without having to sit for the state's health insurance pre-licensing exam.

As many already know, a 2-20 agent can sell health insurance for a carrier for whom that individual is also appointed as a general lines agent. For example, if an agent is appointed with Travelers for property and casualty business they can sell a health-only product that Travelers offers by holding only the 2-20 license.

Previously, a 2-20 agent who wanted to sell health insurance for a health-only company (such as Blue Cross-Blue Shield) was permitted to do so if the health-only company requested that the DFS issue a 2-40 (health insurance) license to the 2-20 agent. In effect, the health part of the 2-20 license was "spun off" by the DFS into a 2-40 license and issued to the agent without the agent having to take any health insurance pre-licensing classes and passing the state exam.

Now, according to the DFS, 2-40 licenses are no longer being spun off from 2-20 licenses. If a 2-20 agent wants to sell health insurance for a health-only company (which does not sell P&C), they must take the pre-licensing course and sit for and pass the state exam to obtain the 2-40 license. The CE requirement will be 50 percent of the required hours in P&C (2-20 license) and 50 percent of the required hours in health (2-40 license). Keep in mind, a class approved for "life and health" will not satisfy the CE requirement for the 2-40 license; the class must be approved for "health only" to apply.

Some agents may currently have the 2-40, as a result of earlier action back in the days when the DFS would "spin-off" the 2-40 from the 2-20. The same CE rules apply here too, classes must meet the "health-only" requirement.

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Copyright FAIA, 7/30/08, David Thompson