The Professional Insurance Agents of New Jersey Inc. is applauding the New Jersey Department of Banking and Insurance’s recent proposal clarifying those activities performed by a professional employer organization that need to be undertaken by a licensed insurance producer. PEOs typically contract with small- to medium-sized businesses to assume various human resource and personnel responsibilities.
“This clarification comes after several years of lobbying by our association,” said PIANJ President John D’Agostino Jr. “PIANJ had explained to the DOBI that when sales representatives of PEOs attempt to sell the PEO’s services to a potential client, they often engage in activities that require an insurance producer’s license. The proposed regulation would clarify when a license is needed.”
The clarifications included in this proposal would reportedly protect insurance consumers by ensuring they receive advice about their insurance needs from a licensed professional. Some activities where an insurance producer’s license is required include providing information about policy rates and coverages; initiating inquiries as to the terms of existing insurance coverages; and answering prospect’s questions on existing insurance programs and insurance needs.
The DOBI’s proposal outlines the exceptions where a PEO does not need an insurance license, such as when providing information about insurance plans when enrolling new members.
“PIANJ commends the department for taking action to protect the insurance-buying public,” added D’Agostino. “We strongly urge the department to adopt the regulation as written as soon as possible.”
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