What Disqualifies a Person From Getting Bonded for an Insurance Job?
Various occupations require employees and agents to be bonded as part of the job, including positions related to finance and insurance. For those interested in pursuing jobs in these fields, understanding the reasoning behind getting bonded and the qualifications required to be bonded can help get things in order prior to employment.
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Bonding Basics
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Depending on the requirements set forth by the state they choose to practice in, insurance agents and brokers may need to be bonded through a surety company. Surety companies review the application for a surety bond and approve or deny it based on the amount of risk they are willing to undertake. When clients interact with a bonded insurance agent or broker, they can be sure that the contracts and services offered are guaranteed. In addition, employers are shielded from potential financial losses due to contract mistakes or failures when they choose to hire bonded insurance agents or brokers.
Basic Qualifications
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The underwriting and approval process for bonding an insurance agent, broker or other principal includes a thorough credit check. Items that would be potential red flags, and possibly disqualify a person from getting bonded, include negative court filings and extensive credit trouble involving multiple delinquent accounts. In addition, the surety company will want to know that the person applying to be bonded is of good moral character. Prior felonies and other legal trouble involving fraud or theft may disqualify a person from getting bonded.
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Industry Standards
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As far as insurance professionals are concerned, surety companies want to see evidence that an applicant has obtained all required insurance licenses and is able to meet the professional conduct standards of the industry. Failure to meet the standards of the profession, such as failure to renew a license or meet continuing education requirements, can keep a person from getting bonded. For independent insurance agents or brokers looking to become bonded, the size, growth potential and financial status of the business is also taken into account.
Considerations
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Surety companies are free to charge various rates or limit coverage based on the risk analysis they complete prior to approving an applicant. Those with an initial high rate of risk, and thus a higher premium, can be re-evaluated at a later time to see if they qualify for a lower premium or additional coverage. Decisions concerning a reduction in premium or increase in coverage are often based on the relationship that develops between a bonded individual and the surety company over time.
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