# Do I Need an Agency License to Hire Insurance Agents? > Usually yes. Why states license the business once it hires agents or takes commissions, with the NAIC model law and real rules from Florida, Georgia and Ohio. Source: https://eseniorinsurance.com/agencies/answers/do-i-need-an-agency-license-to-hire-agents/ Last updated: 2026-10-13 [Home](https://eseniorinsurance.com/) / [ESI Agencies](https://eseniorinsurance.com/agencies/) /Do I Need an Agency License to Hire Insurance Agents? # Do I Need an Agency License to Hire Insurance Agents? Usually, yes. Under the NAIC model law most states follow, a business entity acting as a producer must hold its own license and name a responsible licensed producer, and insurers may not pay commissions to anyone who needed a license and lacked one. If your business employs agents or collects their commissions, license the entity in each state where it does business. [Contract your agency with ESI](https://eseniorinsurance.com/agencies/contracting/) · [Call 801-255-5340](tel:+18012555340) ## Let's set the stage Plenty of agents start as a sole proprietor, then hire a second agent, then a third, and never stop to ask whether the business needs its own license. It usually does. Your individual license covers you. Once a business hires licensed agents, sells under a business name or receives the commissions, states treat that business as a producer in its own right. ## What the model law says Most states built their producer licensing laws on the [NAIC Producer Licensing Model Act (#218)](https://content.naic.org/sites/default/files/model-law-218.pdf) . Three sections do the work: - **Section 2** defines a business entity as a corporation, association, partnership, LLC, LLP or other legal entity. - **Section 6** says a business entity acting as an insurance producer must obtain a producer license and designate a licensed individual responsible for its compliance. Idaho Code 41-1007(2) uses the model's words: "A business entity acting as an insurance producer is required to obtain an insurance producer license." - **Section 13** bars insurers and producers from paying a commission or other compensation to a person for selling insurance if that person had to be licensed and was not. Here's the thing about Section 13. If your entity is the one receiving commissions or overrides on your agents' sales, it is being paid for insurance sales. An unlicensed entity puts its own payments at risk. ## How real states draw the line | State | When the business needs a license | Source | | --- | --- | --- | | [Florida](https://eseniorinsurance.com/agencies/license/florida/) | Any entity acting as an agency, except a single licensed agent in their own name who does not employ, use or appoint other licensees | Florida Statutes 626.112(7)(a) | | [Georgia](https://eseniorinsurance.com/agencies/license/georgia/) | When the entity employs an individual who must be licensed and that person sells for the entity in Georgia | Rule 120-2-3-.05(6) and OCI FAQ | | [Ohio](https://eseniorinsurance.com/agencies/license/ohio/) | When the business operates under an FEIN instead of the owner's Social Security number | ODI and NIPR Ohio pages | | [North Carolina](https://eseniorinsurance.com/agencies/license/north-carolina/) | Any business entity selling, soliciting or negotiating insurance; a sole proprietor cannot license as an entity | G.S. 58-33-31(b) and NCDOI FAQ | | [Texas](https://eseniorinsurance.com/agencies/license/texas/) | Corporations, partnerships and LLCs acting as agents; every person doing agent work for the entity needs an individual license too | Insurance Code 4001.106 and 4001.004 | Florida's exemption is the clearest test we have seen. The moment you hire or appoint another licensed agent, the exemption is gone. ## The agency license does not cover your agents Let's be real: this is the part people get backwards. An agency license does not let unlicensed people sell. Georgia's rule says an agency license does not remove the need for individual agent licenses (120-2-3-.05(8)). Texas requires everyone performing agent acts for the entity to hold their own license. Ohio requires every agent who represents the entity to be affiliated with it. Each agent you hire needs an individual license, plus appointments, in every state where they sell. ## What to do before you hire 1. Form the entity and get its FEIN. 2. License the entity in your home state, naming a responsible licensed producer who holds the right lines. 3. Add nonresident agency licenses in each state where the business will sell. 4. Confirm each new agent's individual license and NPN, and associate them with the agency where the state requires it. 5. Get the agency appointed or contracted with carriers so commissions flow to a licensed entity. Compare state rules and fees on our [agency license hub](https://eseniorinsurance.com/agencies/license/) , and see [how much an agency license costs](https://eseniorinsurance.com/agencies/answers/how-much-does-an-insurance-agency-license-cost/) . ## Building a team with ESI We are a licensed agency in Draper, Utah, and we contract agencies that are building downlines. Once your agency is licensed, start at [agency contracting with ESI](https://eseniorinsurance.com/agencies/contracting/) or read [building a downline](https://eseniorinsurance.com/agencies/learn/building-a-downline/) . ## Frequently asked questions **Can I hire insurance agents as a sole proprietor without an agency license?** It depends on the state. Florida exempts only a single licensed agent who does not employ, use or appoint other licensees, so hiring agents ends the exemption. Georgia requires an agency license once you employ licensed agents who sell for you. **Does an agency license cover my agents?** No. Each agent needs their own individual license and appointments. Georgia's rule says an agency license does not remove the need for individual agent licenses, and Texas requires everyone doing agent work for the entity to be licensed. **Can an unlicensed agency receive commissions?** Section 13 of the NAIC Producer Licensing Model Act bars paying commissions to a person who had to be licensed and was not. If your entity receives commissions or overrides, license it. **Do I need an agency license in every state my agents sell in?** Generally, the entity needs a resident license at home and nonresident agency licenses where it does business. Each state on our hub lists its own nonresident rules. ## Sources 1. [NAIC Producer Licensing Model Act (#218)](https://content.naic.org/sites/default/files/model-law-218.pdf) 2. [Idaho Code 41-1007](https://legislature.idaho.gov/statutesrules/idstat/Title41/T41CH10/SECT41-1007/) 3. [Florida Statutes 626.112](http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0600-0699/0626/Sections/0626.112.html) 4. [OCI: Principal Agency FAQ (May 2025)](https://oci.georgia.gov/media/11321/download) 5. [OCI: Rule 120-2-3-.05](https://oci.georgia.gov/document/document/120-2-3pdf-0/download) 6. [ODI: Business entity FAQs](https://insurance.ohio.gov/wps/portal/gov/odi/agents-and-agencies/business-entity/business-entity-faqs) 7. [NIPR: Ohio resident licensing, business](https://nipr.com/licensing-center/state-requirements/ohio-resident-licensing-business) 8. [G.S. 58-33-31](https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_58/GS_58-33-31.html) 9. [NCDOI: FAQs for business entity licensing](https://www.ncdoi.gov/documents/agent-services/business-entities/open) 10. [Texas Insurance Code Chapter 4001](https://tcss.legis.texas.gov/resources/IN/htm/IN.4001.htm) Updated October 13, 2026 by the Everything Senior Insurance Data Desk. ## Keep reading - [Insurance Agency License Requirements by State](https://eseniorinsurance.com/agencies/license/) - [How Much Does an Insurance Agency License Cost?](https://eseniorinsurance.com/agencies/answers/how-much-does-an-insurance-agency-license-cost/) - [What Is an NPN for Insurance Agents and Agencies?](https://eseniorinsurance.com/agencies/answers/what-is-an-npn/) - [Insurance Agency License Requirements Explained](https://eseniorinsurance.com/agencies/learn/insurance-agency-license-requirements/) - [How to Build an Insurance Agent Downline That Lasts](https://eseniorinsurance.com/agencies/learn/building-a-downline/) - [How to Start an Insurance Agency: 10 Steps](https://eseniorinsurance.com/agencies/learn/how-to-start-an-insurance-agency/) - [Agency Contracting With ESI: How It Works](https://eseniorinsurance.com/agencies/contracting/) ## Contract your agency with ESI Call 801-255-5340 or reach us online. [Contract your agency with ESI](https://eseniorinsurance.com/agencies/contracting/) --- Everything Senior Insurance · Draper, UT · [801-255-5340](tel:+18012555340) · info@eseniorins.com · Agency NPN 18240955 We do not offer every plan available in your area. Currently we represent 95 organizations which offer 3,742 plans nationwide. Please contact Medicare.gov or 1-800-MEDICARE. Not connected with or endorsed by the U.S. government or the federal Medicare program. Everything Senior Insurance is a DBA of Christian Brindle Insurance Services.