Consult this glossary as an educational tool to learn more about frequently used terms for compliance consulting and entity management.



In 21 states, insurance agencies are required to register an affiliation for the DRP alone or, in some cases, for each agent who sells insurance products in their state in accordance with an agreement with the agency. To reference this relationship between the agency and the registered agent, the “affiliation,” you may notice that Texas and Florida instead use the terms “designation” or “appointment,” and California uses “endorsement.”


Captive Agency

A captive agency, also known as an exclusive agency, works for a single carrier. Although a captive agency is restricted in the types of policies and products its agents can sell, it nevertheless receives support from its affiliated carrier through advertising, location, and referrals.

Company Code

A five-digit identification code, also referred to as a co-code, given by NAIC to each insurance company that submits financial information to NAIC.


Department of Insurance

Governmental entity charged with the regulation and administration of insurance laws and other responsibilities associated with insurance.

Designated Home State

An adjuster may live in a state which does not license adjusters, but they can select a designated home state to act as their state of residence. To select a designated home state, the adjuster must complete the pre-licensing and educational requirements of their selected home state beforehand.

Designated Responsible Person/Producer/Party

The Designated Responsible Producers (DRP) is used to identify one or more producers designated or otherwise responsible for this business entity's compliance with relevant state insurance laws, rules, and regulations.

Doing Business As

A Doing Business As (DBA), also known as a fictitious business name, trade name, or an assumed name, is a name that the legal owners of a business register with the state.


Federal Employer Identification Number

A Federal Employer Identification Number (FEIN) is a 9-digit number assigned to businesses by the Internal Revenue Service (IRS). This may also be referred to as a Federal Tax Identification Number.


Insurance Carrier

A business that offers insurance coverage is known as an insurance carrier. Even while many people acquire insurance from an agency, insurance carriers are responsible for underwriting, claims management, and payments.


Line of Authority

A line of authority (LOA) is a general subject area of insurance that a producer can be licensed to sell. These subject areas include Life, Accident & Health or Sickness, Property, Casualty, Variable Life and Variable Annuity Products, and Personal Lines to name a few.


Managed General Agent

A managing general agent (MGA) or a managing general underwriter (MGU) is a specialized insurance agent or broker that has been granted underwriting authority by an insurer and can administer programs as well as negotiate contracts for an insurer.


National Association of Insurance Commissioners

The National Association of Insurance Commissioners (NAIC) delivers insurance commissioners the knowledge, information, and analysis they need to regulate the sector and keep consumers protected.

National Insurance Producer Registry

The National Insurance Producer Registry (NIPR) is a not-for-profit technology company that acts as a data center of producer licensing information.

National Producer Number

The National Producer Number is a unique NAIC identifier assigned through the licensing application process. NPNs are assigned to all individuals and most business entities on the PDB.


Producer Database

The Producer Database PDB is an electronic database consisting of information relating to insurance agents and brokers (producers). The PDB links state regulatory licensing systems into one common system, establishing a repository of producer licensing information.


Reinstatement Period

A reinstatement period is a timeframe for an agent whose license has expired as a result of failing to renew or satisfy continuing education requirements. The agent may submit an application to reinstate their license if they are eligible to renew during the reinstatement period.

Risk Purchasing Group

A risk purchasing group (RPG) is a group of insureds engaged in similar businesses or activities banding together to purchase insurance coverage from a commercial insurer.


Secretary of State

In states that have one, the Secretary of State (SoS) is the chief clerk of the state and is often the primary custodian of important state records.

Service of Process

Service of Process (SOP) is the procedure by which a party to a lawsuit gives an appropriate notice of initial legal action to another party, court, or administrative body in an effort to exercise jurisdiction over that person so as to force that person to respond to the proceeding before the court, body, or other tribunal.

Surplus Lines Insurance

Surplus lines insurance protects against a financial risk that is too great or too uncommon for a regular insurance company to take on. Surplus lines insurance can be purchased by individuals or companies.


Third Party Administrator

A third-party administrator (TPA) provides operational services such as claims processing and employee benefits management under contract to another company.

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