Unfortunately, state insurance regulators take a dim view of agents operating without licenses, even if the agents have them in other states. In cases where an association is involved, care needs to be taken that the association's mailings do not inadvertently violate the insurance laws. Association executives are usually not licensed to sell insurance, and so mass mailings need to observe the fine legal line between solicitation and merely informing members of benefits. If a purchasing group is used, most states require a detailed filing that explains the activities of the purchasing group and shows regulators that it falls within the legal limitations. On the other hand, if an admitted carrier is used without a purchasing group, the carrier's filings of policy forms and endorsements will usually be required for regulatory approval, unless the program is using standard forms already approved.
Programs can be very profitable if carefully designed and run.
The more you know about the peculiarities of program business, and the deeper you are into the special needs of your target group, the more successful you are likely to be. The author Randall Kleinman, JD, CPCU, CLU, spends much of his time working with insurance agencies and their legal concerns. The author welcomes suggestions for article topics.