New Jersey Life Producer Law Practice Test

What action must a producer who employs another producer take?

1. Notify the Commissioner only if requested

2. Maintain authorization to write at least as many lines of insurance as the employee producer

3. Provide benefits to the employee producer

4. Register the employment with a labor authority

The correct answer is: Maintain authorization to write at least as many lines of insurance as the employee producer

A producer who employs another producer is required to maintain authorization to write at least as many lines of insurance as the employee producer. This requirement ensures that the employer has the necessary qualifications and permissions to oversee the business activities of the employed producer, especially in contexts where the employee may be writing insurance policies. This alignment within the licensing standards promotes compliance with regulatory requirements and helps facilitate proper supervision and oversight of the employee’s activities. Maintaining appropriate authorizations supports the integrity and professionalism of the insurance industry, ensuring that all producers operate within the scope of their licenses and are equipped to provide the necessary services associated with those licenses. This also helps protect consumers by ensuring that both the employer and employee are qualified to offer the insurance products they are dealing with.