Author: VU Faculty

An agency receptionist transfers phone calls, takes messages, opens mail, directs clients to CSRs, and accepts direct bill payments from clients. She allegedly does not discuss coverage with clients. Does she need to be licensed?

"I have a receptionist who is not licensed and her job is to open mail, answer the telephone, do the daily mail, and direct clients to the CSRs. She will also take direct bill payments from clients and will direct them to the company either by mail or EFT transfer. She in no way discusses coverage with clients or rates policies. My question is does she need to be licensed to take payments from clients."

This is a common question and one that has both regulatory and practical answers. As indicated below, your state insurance regulations will probably determine whether this person is required to be licensed. Whether it's a good idea otherwise depends on several factors.

That would probably best be answered by your state association, since licensing laws vary by state. However, one advantage of licensing is that if the receptionist's job changes in the future and she does discuss coverage issues with an insured, she's "legal."

On the other hand, forcing a non-technical person to obtain a license she may never need could cost the agency a good employee, given the difficulty of sitting in pre-licensing classes and taking the test. 

Seems this decision partly depends on what the agency management sees in her future at the agency.

I think it really depends on the state administrative law. Your state association is the best one to answer this. In Illinois, the position would not need a licensed individual.

Most states won’t require a receptionist to be licensed. But most laws do say anyone who discusses coverage should be licensed. Unfortunately, when people make their payments late one of their questions is, “Am I covered?” If the receptionist answers that question, rather than directing the person to a licensed CSR, they could be acting as an agent without being licensed. Since licensing laws and enforcement of them vary from state to state, it’s always a good idea to check with the state insurance department.

I doubt it but the agent should check with the insurance department to make sure.

First, review your state licensing requirements. They may require a license.

Second, billing matters and disputes over communications (messages for agents, etc.) are frequent sources of E&O disputes. If the person isn't licensed, you may need to very carefully limit their activity.

Often one of the lowest paid, yet most important, positions in an agency is the receptionist. She is typically the first point of contact for prospects and customers. Her demeanor, personality, and communication skills can make or break an account. It is not unusual for agencies to lose customers because of a surly, incompetent, or ignorant-sounding receptionist. A really great receptionist is a potential sales or service candidate...you can teach insurance, but you can't teach personality.

Send her to licensing school. It will probably make her a better employee. Plus, if she finds it interesting, you could have someone who can make the natural progression into sales or service, at least in a back-up capacity. It also sends a message to her and the entire office just how imporant you think education is and how committed you are to the professional development of your staff. If you have a good communications workshop in your area, send her to that as well.

There are certainly administrative positions in an agency where a license is not necessary to do the job. It appears that your receptionist is the mail person, works a little with accounting,and conducts the flow of traffic,be it telephone or walk in business,to the right place. Unless your state has recently passed new licensing requirements, these tasks do not require a licensed person. With that said, if in your agency like so many we visit, the job of receptionist is a stepping stone to another position in the agency (e.g., PL CSR), then having this person work on getting a license might be a good idea. It will let you know of her commitment to continue with the agency.

You should contact your state insurance department and obtain a clarification. If in doubt, it's always best to have all employees licensed, especially if they fill in temporarily for other licensed employees or want a promotion that requires a license.

Contact your state association. They can tell you in a heartbeat what NC requires. Ask for Stuart Powell. He knows everything. I know that because he told me so.

Based on what you describe, it is probably not required that she be licensed. You should confirm that with your state association or insurance department. That doesn't mean that it isn't a good idea to license her and many agencies do. Anytime you have someone dealing with customers, there is the chance something they say could be construed as coverage advice. If there is an uncovered claim that can be laid on an allegation involving an unlicensed person, there is a potential for regulatory action. Personally, I'd have her licensed...the education will make her a more knowledgeable, productive, and valuable employee.