What Is Contracting? Definition | Epic Life Glossary

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After licensing, an agent completes carrier paperwork such as the NPN, license copies, E&O proof, and direct deposit details. The carrier or the agent's upline reviews it and sets a contract level. Processing can take days or weeks, and each carrier has its own steps. Agents should confirm they are contracted and appointed before submitting any application.

Source: naic.org

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Related terms

Carrier Appointment: A carrier appointment is the approval an insurance company gives an agent to sell its policies in specific states. The carrier registers the agent with each state's insurance department.
Appointment: An appointment is a carrier's formal record that an agent may sell its products in a state. The carrier files it with the state, and it requires a valid license first.
Contract Level: A contract level is the percentage tier of a carrier's commission schedule that an agent is paid. A higher level means a larger share of the premium as commission.
Errors and Omissions Insurance (E&O): E&O insurance, short for errors and omissions insurance, covers an agent against claims that a mistake or missed duty in their work harmed a client. It is a form of professional liability coverage.
Direct Carrier Contract: A direct carrier contract is an agreement between an agent and an insurance company without a marketing organization in between. The carrier sets the commission schedule.

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