What is the purpose of an insurance broker license bond?
The insurance license bond assures the recovery of fines, fees, and or expenses, levied by state regulators for non-compliance with state regulations. These bonds also assure recovery of losses incurred by borrowers or customers, that result from a licensees non-compliance with these regulations. The majority of state governments license insurance brokers and agents to ensure that its citizens receive honest, professional services. However, licensing also means that states assume the responsibility for the actions of its insurance brokers. This places the state at risk for lawsuits. By requiring surety bonds, the state governments can reduce this risk when brokers are applying for or renewing their licenses.
