Q: What are the restrictions an unlicensed employee has when talking with an insured? Is coverage the only thing they cannot discuss? Can they email certificates of insurance and motor vehicle reports (MVRs)?

Response 1: Anyone handling any aspect of a client's account should be licensed. That protects the agency because whenever dealing with an account, the need for additional coverage, higher limits and more can arise. That is also good from a marketing standpoint, since every contact with a client should be viewed as an account-improvement opportunity. 

But I want to stop you there on MVRs. That issue goes far beyond licensing. MVRs are protected information under the Fair Credit Reporting Act and should only be ordered with the driver's permission. They should be provided only to the driver, not to another party such as a potential or incumbent employer. Carriers have the right to get the results of an MVR, and they should be doing the ordering and the reviewing of MVRs.

If your agency is ordering and providing them to clients as a "service," that is a dangerous and potentially expensive option—and not an advisable course of action for an agency or brokerage.

Response 2: You would need to check with your errors & omissions insurer, state association and the insurance regulations for your state.

Typically, unlicensed employees only can perform ministerial acts, such as administrative and secretarial duties as directed by a licensed producer. Taking phone messages, copy typing letters, or copy typing applications are included in that. They could email documents at the direction of and under the supervision of the producer and should say so in the transmittal. And that transmittal should refer the receiver to the producer for questions—not to the administrator sending the document.

Response 3: License everyone in the agency and these issues vanish. Yes, there is more expense involved, but a knowledgeable, educated employee is more valuable and prepared to move up in the agency. It's a great marketing tool also.

Response 4: This can be very state specific. In general terms, an unlicensed person can do processing and typically are not involved in customer interaction, except to forward calls. It is best to check with your state insurance department or your state association to address specific state requirements.

Response 5: Unlicensed personnel can perform clerical functions. Issuing certificates of insurance and taking information should be fine. However, COIs need to be signed by licensed personnel.

Response 6: Check your state's licensing law. In my state, employees do not have to be licensed to perform strictly clerical functions. They should be able to mail documents without a license as long as they don't discuss the contents of the document. 

However, it is difficult for the unlicensed employee to perform strictly clerical functions if clients have access to them by phone or email. Inevitably, they will get a question that involves coverage. If they are trained to forward these questions to licensed individuals, you might be okay, but it is easy to cross the line.

This question was originally submitted by an agent through the Big “I" Virtual University's (VU) Ask an Expert Service, with responses curated from multiple VU faculty members. Answers to other coverage questions are available on the VU website. If you need help accessing the website, request login information.