6 ms·

I'm still not catching why selling insurance requires licensing. This is not practicing medicine, this is not giving people haircuts, it's not even preparing fo

by lpsz 11y ago

I'm still not catching why selling insurance requires licensing. This is not practicing medicine, this is not giving people haircuts, it's not even preparing food, all of which make sense to be regulated. It's just selecting from a list of plans. In an ideal world, people/employers should just be able to do it themselves and cut out the middleman.

skyhatch1 11y ago
Imagine someone comes along and convinces you that you need insurance. Years later, you finally need to make a claim. You call the insurance company only to learn your situation was underinsured or not insured correctly at all. In that situation, they have no legal obligation to pay you. This would not have happened if the person selling you the insurance was under a legal (read: license) obligation to provide you the most appropriate insurance.
- prostoalex 11y ago
  Do agents have a legal obligation to set the customer up with the most appropriate insurance possible? I could see how even an old-school agent could forget to mention earthquake insurance for home insurance or lack of acupuncture in health plan.
mmayberry 11y ago
you would rather the guy who cuts your hair have a license than the person that picks your health plan?
st3v3r 11y ago
"I'm still not catching why selling insurance requires licensing" Well, reading what Zenefits was doing, and how badly they screwed up might enlighten you.
smileysteve 11y ago
Especially that licensing requires X time in an app. Test about consumer protection, knowledge, or meanings, but don't require meaningless time.
riffraff 11y ago
I am not sure why the parent comment is being downvoted, but for one I'd also like to know why selling insurance requires licensing.
- minimaxir 11y ago
  The consequences of bad actors in insurance issuing are much more severe than bad hairdressers or bad cooks.
  - lpsz 11y ago
    Only because of incredibly confusing pricing schemes with copays, deductibles, lifetime limits, out-of-pocket limits, in-network limits, and so on and so forth. This should be addressed by making information transparent to all buyers, not through middlemen. A bad hairdresser can slice off my ear and a bad cook can poison me.
    - TheOtherHobbes 11y ago
      It's rare for hairdressers to act in bad faith, because acting in bad faith - slicing off ears for fun - is a bad way to make living. In finance, it's incredibly easy to make a living by acting in bad faith. You can offer insurance with no serious intention to pay out, and tie up claims in bureaucracy and legal loopholes. Good regulation should go some way to minimising bad faith actors. In fact the industry seems quite scammy anyway. But it would be much, much more scammy - to a criminal extent - with no regulation at all.
      - deleted 11y ago
        [deleted]
  - pbreit 11y ago
    "bad hairdressers or bad [personal] cooks" Both of which require licensing.
- dkarapetyan 11y ago
pbreit 11y ago
Driving someone in a car for money requires licensing. Cutting someone's hair for money requires a license. Pouring a beer for money requires a license. Estimating the value of a house for money requires a license. Making a quilt for money requires a license. And many, many, many more. By comparison, advising on health insurance actually kinda makes sense. California licensee lookup: http://www2.dca.ca.gov/pls/wllpub/wllquery$.startup http://www2.dca.ca.gov/pls/wllpub/wllquery$.startup
- njharman 11y ago
  Just driving a car requires a license.
  - pbreit 11y ago
    Good point. In fact, just owning a car and not even driving requires registration!
onion2k 11y ago
I'm still not catching why selling insurance requires licensing. It's a legal mechanism that stops insurance companies selling people policies that don't actually cover them for what they need. Essentially it shifts the understanding of what insurance is required from the buyer to the insurer. It's harder to refuse a pay out if your salesperson has to make sure all the necessary boxes are ticked.
jeffwass 11y ago
Insurance plans are complicated. To ensure the customer knows all his/her options and the differences between the plans requires some understanding and basic training. If I flip your concern around, why do you think it would be appropriate for someone to sell me a health insurance plan without any understanding of what the different plans offer or which plan best served my needs? If I'm buying insurance, I expect the salesperson to be able to understand my situation, what I'm looking for, and tell me all my available options, and the benefits/drawbacks of each. Licensing makes sure the salesperson goes through the efforts to get to this point.
- prostoalex 11y ago
  > why do you think it would be appropriate for someone to sell me a health insurance plan without any understanding of what the different plans offer or which plan best served my needs I signed up with Covered California a few months back and while they provided basic facts and a comparison matrix of plans, they didn't go out of their way to make sure it would fit my needs just perfectly. With nothing but a Web site and a wizard, how would they?
- lpsz 11y ago
  I expect the salesperson to be able to understand my situation, what I'm looking for, and tell me all my available options, and the benefits/drawbacks of each. If so, it sounds like insurance salespeople are similar to tax or financial advisors, and regulation forces them to read through and familiarize themselves with all of the options. Fair enough. Just wish the system itself was revamped, pricing schemes simplified, and information made more accessible, to make even this unnecessary.
  - VLM 11y ago
    > Just wish the system itself was revamped, pricing schemes simplified, and information made more accessible, to make even this unnecessary. One mans bug is another mans profit. So that's not happening.
  - mbesto 11y ago
    Except, anyone in America who doesn't get insurance through work has to assess all of the benefits/drawbacks of each plan without the help of a broker today. So the point is kind of moot. I think the bigger implications are that if I buy insurance, I can at least go into a database and look up to see if a broker is licensed. If a broker's information is stored in a database somewhere, it'd be much easier to seek out the bad actor for punitive damages. It also provides some fear on the broker side that if their information is stored somewhere that they are somewhat trackable.

by lpsz 11y ago

skyhatch1 11y ago

Imagine someone comes along and convinces you that you need insurance. Years later, you finally need to make a claim. You call the insurance company only to learn your situation was underinsured or not insured correctly at all. In that situation, they have no legal obligation to pay you. This would not have happened if the person selling you the insurance was under a legal (read: license) obligation to provide you the most appropriate insurance.

prostoalex 11y ago
Do agents have a legal obligation to set the customer up with the most appropriate insurance possible? I could see how even an old-school agent could forget to mention earthquake insurance for home insurance or lack of acupuncture in health plan.

mmayberry 11y ago

you would rather the guy who cuts your hair have a license than the person that picks your health plan?

st3v3r 11y ago

"I'm still not catching why selling insurance requires licensing" Well, reading what Zenefits was doing, and how badly they screwed up might enlighten you.

smileysteve 11y ago

Especially that licensing requires X time in an app. Test about consumer protection, knowledge, or meanings, but don't require meaningless time.

riffraff 11y ago

I am not sure why the parent comment is being downvoted, but for one I'd also like to know why selling insurance requires licensing.

minimaxir 11y ago
The consequences of bad actors in insurance issuing are much more severe than bad hairdressers or bad cooks.
- lpsz 11y ago
  Only because of incredibly confusing pricing schemes with copays, deductibles, lifetime limits, out-of-pocket limits, in-network limits, and so on and so forth. This should be addressed by making information transparent to all buyers, not through middlemen. A bad hairdresser can slice off my ear and a bad cook can poison me.
  - TheOtherHobbes 11y ago
    It's rare for hairdressers to act in bad faith, because acting in bad faith - slicing off ears for fun - is a bad way to make living. In finance, it's incredibly easy to make a living by acting in bad faith. You can offer insurance with no serious intention to pay out, and tie up claims in bureaucracy and legal loopholes. Good regulation should go some way to minimising bad faith actors. In fact the industry seems quite scammy anyway. But it would be much, much more scammy - to a criminal extent - with no regulation at all.
    - deleted 11y ago
      [deleted]
- pbreit 11y ago
  "bad hairdressers or bad [personal] cooks" Both of which require licensing.
dkarapetyan 11y ago

pbreit 11y ago

Driving someone in a car for money requires licensing. Cutting someone's hair for money requires a license. Pouring a beer for money requires a license. Estimating the value of a house for money requires a license. Making a quilt for money requires a license. And many, many, many more. By comparison, advising on health insurance actually kinda makes sense. California licensee lookup: http://www2.dca.ca.gov/pls/wllpub/wllquery$.startup http://www2.dca.ca.gov/pls/wllpub/wllquery$.startup

njharman 11y ago
Just driving a car requires a license.
- pbreit 11y ago
  Good point. In fact, just owning a car and not even driving requires registration!

onion2k 11y ago

I'm still not catching why selling insurance requires licensing. It's a legal mechanism that stops insurance companies selling people policies that don't actually cover them for what they need. Essentially it shifts the understanding of what insurance is required from the buyer to the insurer. It's harder to refuse a pay out if your salesperson has to make sure all the necessary boxes are ticked.

jeffwass 11y ago

Insurance plans are complicated. To ensure the customer knows all his/her options and the differences between the plans requires some understanding and basic training. If I flip your concern around, why do you think it would be appropriate for someone to sell me a health insurance plan without any understanding of what the different plans offer or which plan best served my needs? If I'm buying insurance, I expect the salesperson to be able to understand my situation, what I'm looking for, and tell me all my available options, and the benefits/drawbacks of each. Licensing makes sure the salesperson goes through the efforts to get to this point.

prostoalex 11y ago
> why do you think it would be appropriate for someone to sell me a health insurance plan without any understanding of what the different plans offer or which plan best served my needs I signed up with Covered California a few months back and while they provided basic facts and a comparison matrix of plans, they didn't go out of their way to make sure it would fit my needs just perfectly. With nothing but a Web site and a wizard, how would they?
lpsz 11y ago
I expect the salesperson to be able to understand my situation, what I'm looking for, and tell me all my available options, and the benefits/drawbacks of each. If so, it sounds like insurance salespeople are similar to tax or financial advisors, and regulation forces them to read through and familiarize themselves with all of the options. Fair enough. Just wish the system itself was revamped, pricing schemes simplified, and information made more accessible, to make even this unnecessary.
- VLM 11y ago
  > Just wish the system itself was revamped, pricing schemes simplified, and information made more accessible, to make even this unnecessary. One mans bug is another mans profit. So that's not happening.
- mbesto 11y ago
  Except, anyone in America who doesn't get insurance through work has to assess all of the benefits/drawbacks of each plan without the help of a broker today. So the point is kind of moot. I think the bigger implications are that if I buy insurance, I can at least go into a database and look up to see if a broker is licensed. If a broker's information is stored in a database somewhere, it'd be much easier to seek out the bad actor for punitive damages. It also provides some fear on the broker side that if their information is stored somewhere that they are somewhat trackable.