New Jersey Life Producer Law Practice Test

Which of the following activities does not require a license in New Jersey?

1. Selling insurance policies

2. Explaining policies to policyholders in response to their questions

3. Collecting premiums from policyholders

4. Designing insurance plans

The correct answer is: Explaining policies to policyholders in response to their questions

In New Jersey, explaining insurance policies to policyholders in response to their questions does not require a license because this activity is categorized as providing information rather than selling or administering insurance. When policyholders have inquiries about their existing policies, they are seeking clarification or understanding about their coverage. This kind of assistance falls within the scope of customer service, which does not necessitate a formal insurance license. In contrast, selling insurance policies, collecting premiums, and designing insurance plans are activities that involve transactions or the formulation of new products, which clearly require a licensed professional to ensure compliance with regulatory standards and consumer protection laws. Therefore, option B is accurate as it does not constitute a licensed activity in the context of New Jersey insurance law.