Glossary · Insurance agency commissions
Resident vs. nonresident producer license
A resident producer license is issued by the producer’s home state, where they live or have their principal place of business; a nonresident producer license is issued by another state, usually on the strength of the home-state license, so the producer can sell and be paid commission on business there.
What it means
Washington’s statute is a typical example. RCW 48.17.010 defines the home state as the one where the producer “maintains the insurance producer's or adjuster's principal place of residence or principal place of business.” RCW 48.17.173 grants a nonresident license if, among other conditions, “The person is currently licensed as a resident and in good standing in the person's home state,” has paid the fees and filed the uniform application, and the home state treats Washington residents the same way. Every license is tied to the producer’s NPN.
What it means for commission: commission follows the license. RCW 48.17.490 says an insurer or producer “shall not pay a commission, service fee, or other valuable consideration to a person for selling, soliciting, or negotiating insurance in this state if that person is required to be licensed under this chapter or chapter 48.15 RCW and is not so licensed.” A policy on property or a client in a state where the producer holds no license is a compliance problem first and a commission problem second. This page is general information, not legal advice; your agreement and your state’s law decide.
How it shows on a commission statement
Statements list policies, not licenses, so the check is upstream: before a producer writes out-of-state business, the nonresident license and the carrier’s appointment in that state should both be in place. Each one may carry an appointment fee.
In reconciliation, and what Lapidar does
Lapidar does not check licenses. It checks commission on each line by carrier, line of business and new or renewal, regardless of the state the policy is in.
Example
| State | License | Based on | Renewal |
|---|---|---|---|
| Washington | Resident | Exam and application in the home state | CE in Washington |
| Oregon | Nonresident | Good standing in Washington | Usually follows home-state CE |
| Idaho | Nonresident | Good standing in Washington | Usually follows home-state CE |
Common mistakes to check
- Writing a policy for a client who moved to a state where the producer has no nonresident license.
- Letting the home-state license lapse, which can put the nonresident licenses at risk too.
- Forgetting that the carrier needs an appointment in the new state as well.
Questions
What is the difference between a resident and a nonresident insurance license?
The resident license comes from the state where you live or have your principal place of business. Nonresident licenses come from other states, usually based on your home-state license in good standing.
Do I need to take an exam for a nonresident license?
Generally not when your home state is reciprocal; the nonresident state relies on your resident license. Check the state’s requirements.
Can I receive commission on a policy in a state where I am not licensed?
In Washington, RCW 48.17.490 bars paying or accepting commission for selling, soliciting or negotiating there without a required license. Other states have similar rules.
Sources
- Washington State Legislature, Chapter 48.17 RCW: insurance producers, sections 48.17.010, 48.17.150, 48.17.173 and 48.17.490. Retrieved October 14, 2026.
Lapidar is commission reconciliation software for independent insurance agencies, in its founding pilot. Related: National Producer Number.