South Carolina Insurance Broker Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain a South Carolina Insurance Broker bond.
At a Glance:
- Lowest Cost Cost: $100 per year or $10 per month
- Bond Amount: $10,000
- Who Needs it: All resident insurance brokers operating in South Carolina
- Purpose: To ensure that consumers will receive compensation for financial harm if the broker violates licensing law
- Who Regulates Insurance Brokers in South Carolina: The South Carolina Department of Insurance
South Carolina Statute 38-45-20 requires all insurance brokers operating in the state to obtain a license from the Department of Insurance. The South Carolina legislature enacted the licensing requirement to ensure that insurance brokers engage in ethical business practices. To provide financial security for the enforcement of the licensing law, resident insurance brokers must purchase and maintain a $10,000 surety bond to be eligible for licensure.
Only licensed property and casualty insurance agents are eligible to apply for a broker license.
What is the Purpose of the South Carolina Insurance Broker Bond?
South Carolina requires insurance brokers to purchase a surety bond as part of the application process to obtain a professional license. The bond ensures that consumers will receive compensation for financial harm if the broker fails to abide by the regulations outlined in South Carolina Statute 38-45-20. Specifically, the bond protects consumers if the broker engages in any acts of fraud or fails to transmit payments to a carrier. In short, the bond is a type of insurance that protects the consumers if the insurance broker violates the terms of their license.
How Can an Insurance Agent Obtain a South Carolina Insurance Broker Surety Bond?
BondExchange makes obtaining a South Carolina Insurance Broker bond easy. Simply login to your account and use our keyword search to find the “Broker” bond in our database. Don’t have a login? Gain access now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email or chat from 7:30 AM to 7:00 PM EST to assist you.
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Is a Credit Check Required for the South Carolina Insurance Broker Bond?
No, a credit check is not required for the South Carolina Insurance Broker bond. Because the bond is considered relatively low risk, the same low rate is offered to all insurance brokers in the state regardless of their credit history.
How Much Does the South Carolina Insurance Broker Bond Cost?
The South Carolina Insurance Broker bond costs either $100 per year or $10 per month.
Who is Required to Purchase the Bond?
South Carolina requires resident insurance brokers to purchase a surety bond as a prerequisite to obtaining a professional license. To paraphrase South Carolina Statute 38-45-10, an insurance broker is a licensed property and casualty insurance agent that:
- Sells, solicits, or negotiates insurance on behalf of a consumer
- Takes insurance applications from consumers
- Advertises their capability to obtain surplus lines policies
- Obtains surplus lines coverage for consumers
Exemptions to this definition include:
- Employees of the broker
- Licensed property and casualty producers placing surplus lines coverage through an insurance broker
BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.
How do Insurance Brokers Apply for a License in South Carolina?
Insurance brokers in South Carolina must navigate several steps to obtain a license. Below are the general guidelines, but applicants should refer to the application instructions for details on the process.
Renewal Period – All South Carolina Insurance Broker Licenses expire in May of even-numbered years (2022, 2024, etc.) and must be renewed before the expiration date
Step 1 – Obtain a Producer License
Applicants must obtain a producer license before applying for their broker license. To obtain a producer license, applicants must:
All license applicants must submit their fingerprints to the Department of Insurance.
Step 2 – Complete the Prelicensing Education
Applicants must complete 12 hours of prelicensing education to be eligible to apply for a broker license. Contact the Department of Insurance for help finding an approved course provider.
Step 3 – Purchase a Surety Bond
Resident insurance brokers must purchase and maintain a $10,000 surety bond
Step 4 – Pass the Exam
Brokers must pass an additional exam before submitting a license application.
Step 5 – Complete the Application
All South Carolina Insurance Broker License applications should be completed online here. Brokers must complete the application in its entirety and pay a $200 licensing fee.
How do South Carolina Insurance Brokers Renew Their Licenses?
Insurance brokers must pay a $200 renewal fee during May of even-numbered years and will receive an email containing instructions on how to do so. To renew their producer licenses, brokers must complete 24 hours of continuing education and submit their completed renewal applications, including a $25 fee, online here. All South Carolina Insurance Producer Licenses expire every two years and producers must renew their license by the last day of their birth month.
What are the Insurance Requirements for the South Carolina Insurance Broker License?
South Carolina does not require insurance brokers to obtain any form of liability insurance as a prerequisite to obtaining a professional license. Resident insurance brokers must purchase and maintain a $10,000 surety bond.
How do South Carolina Insurance Brokers File Their Bonds?
Insurance brokers should mail their completed bond forms, including the power of attorney, to the following address:
South Carolina Department of Insurance
P.O. Box 100105
Columbia, SC 29202-3105
The surety bond requires signatures, including witness signatures, from both the surety company that issues the bond and from the applicant. The surety company should include the following information on the bond form:
- Legal name and address of the entity/individual(s) buying the bond
- Surety company’s name and address
- Bond amount
- Date of the bond is signed
What Can South Carolina Insurance Brokers do to Avoid Claims Made Against Their Bonds?
To avoid claims against their bonds, insurance brokers in South Carolina must follow all license regulations in the state, including some of the most important issues below that tend to cause claims:
- Transmit all funds received from consumers to the relevant party
- Do not engage in any acts of fraud