What License Do You Need to Sell Annuities?

Selling annuities requires specific licenses, dictated by the annuity type, covering both state insurance regulations and federal securities laws. This ensures professionals have the necessary knowledge to advise clients. Understanding these requirements is foundational for a career in annuity sales.

State Insurance License Requirements

Selling fixed annuities requires a state insurance producer license, typically with a “Life” line of authority. This license ensures knowledge of insurance products and consumer protection. Several preparatory steps are required before applying.

Pre-licensing education is a primary requirement, involving a set number of approved coursework hours. Hours vary by state, often 20-40 per line of authority, with some states requiring additional hours for ethics or state insurance law. Courses cover general insurance principles, product knowledge, and regulatory frameworks. A certificate verifies completion, typically valid for 180 days, within which the licensing exam must be passed.

After pre-licensing education, candidates must pass a state insurance licensing exam. Administered by a third-party, this exam assesses comprehension of required material. Content covers broad insurance topics and state-specific laws, with a passing score typically 70%. Some states may have different passing score requirements.

A background check, including fingerprinting, is a standard requirement for a state insurance license. Most states require electronic fingerprints for a criminal history check. This ensures individuals meet suitability and ethical standards. Fingerprints are submitted to a vendor and forwarded to law enforcement agencies for review.

Applying for Your State Insurance License

After completing pre-licensing education, passing the state exam, and initiating the background check, submit the license application. The National Insurance Producer Registry (NIPR) streamlines this process across many states. Applicants can submit information online through the NIPR portal or their state’s Department of Insurance website.

The application requires personal details, proof of exam passage, and sometimes background check results. First-time applicants need to provide their Social Security Number and date of birth. Application fees vary by state and lines of authority, typically paid electronically.

After submission, the application enters processing. Some states process applications within one business day, while others take longer. States often request applicants allow 7-10 business days for review. Wait at least 48 hours after passing the exam before applying to allow results to process.

Securities Licenses for Variable Annuities

Selling variable annuities requires additional licensing beyond a state insurance license because these products are securities regulated by the Financial Industry Regulatory Authority (FINRA). This dual regulation ensures proficiency in both insurance and securities. Primary FINRA licenses required are the Series 6 or Series 7, along with the Series 63.

The Series 6 license, or Investment Company and Variable Contracts Products Representative Qualification Examination, allows individuals to sell packaged investment products like mutual funds, variable annuities, and variable life insurance. This exam has 50 multiple-choice questions, a 1-hour 30-minute time limit, and a 70% passing score. Content covers seeking business, opening accounts, providing investment information, and processing transactions.

The Series 7 license, or General Securities Representative Examination, is a broader qualification permitting the sale of a wider range of securities, including stocks, bonds, options, and all Series 6 products like variable annuities. Both Series 6 and Series 7 exams require candidates to first pass the Securities Industry Essentials (SIE) exam, which can be taken without firm sponsorship. The SIE exam assesses general securities industry knowledge.

Candidates must be sponsored by a FINRA-member firm to take the Series 6 or Series 7 exams. Sponsorship involves the firm submitting a Uniform Application for Securities Industry Registration or Transfer (Form U4) on the candidate’s behalf, including personal, professional, and criminal background information. Form U4 also initiates fingerprinting, typically submitted within 30 days of filing. Once sponsored and U4 processed, a testing window opens to schedule the exam.

The Series 63 license, or Uniform Securities Agent State Law Examination, is required when selling variable annuities. This exam focuses on state securities laws and regulations, often called “Blue Sky Laws.” Unlike the Series 6 or Series 7, the Series 63 does not require firm sponsorship. It ensures representatives understand ethical practices and legal requirements for securities transactions within states.

Maintaining Your Annuity Licenses

Maintaining state insurance and FINRA securities licenses requires ongoing compliance with continuing education (CE) and renewal requirements. These obligations ensure licensed professionals remain current with industry changes, ethical standards, and regulatory updates. Failure to meet requirements can result in license suspension or termination.

State insurance licenses require a set number of continuing education hours within each renewal period, often every two years. The requirement is around 24 CE hours biennially, with a portion dedicated to ethics, usually three hours. Some states may mandate specific topics like anti-fraud training or flood insurance, depending on lines of authority. Courses can be completed through approved online or self-study formats.

FINRA securities licenses have continuing education requirements, primarily through the Regulatory Element and Firm Element. Since January 1, 2023, the Regulatory Element must be completed annually by December 31 for each registration held. This online training focuses on rule changes and regulatory developments relevant to the individual’s registration category. The Firm Element requires broker-dealers to establish an annual training program tailored to their business.

License renewal for state insurance and FINRA licenses involves submitting applications and paying fees. State insurance licenses have varying renewal periods, often every two years, but some may be longer. Renewal applications are submitted online through portals like NIPR, and fees vary by state. For FINRA licenses, ongoing registration with a member firm and annual CE completion maintain active status. Individuals leaving the industry may have a limited period, such as five years, to reactivate FINRA qualifications without retesting, provided they meet specific CE conditions.