What qualifies an insurance product for exemption from licensing requirements?

An insurance product qualifies for exemption from licensing requirements when it does not require underwriting. Underwriting is the process in which an insurance company assesses the risk of insuring a prospective policyholder and determines the appropriate premium to charge based on that risk. If a product does not involve underwriting, it generally means that it is simple in nature, does not require individual assessment of risk, and does not need the same level of regulatory scrutiny as traditional insurance products.

For instance, products that are standardized or provided on a guaranteed issue basis—a type of insurance that does not take individual health histories into account—often fall into this category, allowing them to be offered without the necessity of licensing for the sellers.

The other options listed typically do not qualify an insurance product for exemption. For instance, selling door-to-door can occur with regulated products and does not dictate licensing requirements. Non-variable products are still subject to standard insurance regulations regardless of their structure. Lastly, offering a product free of charge does not remove it from the definition of insurance or licensing stipulations; it simply means there is no cost associated with it. Thus, the focus on underwriting criteria is key to understanding why a product might not require an insurance license.