Marketplaces embedding insurance purchase journeys often cross the line into "producer" activity without realizing it. The combination of intake forms, quote displays, and placement-based compensation creates licensing triggers in most US states.
This hub helps you identify which operating model fits your platform, structure compensation that survives regulatory scrutiny, and design the user journey so the licensed broker owns the regulated steps.
Answer these questions to find the right starting point.
Based on your answers, your model may fit within a referral-only or tech-only structure that doesn't require producer licensing.
- Keep quote displays and recommendations on the broker side
- Maintain strict "no solicitation" boundaries
- Ensure compensation isn't contingent on binding
Your model includes elements that often trigger licensing requirements. You may need to either:
- Redesign the UX to move quotes/recommendations to the broker
- Restructure compensation away from placement contingency
- Plan for producer licensing in target states
- Embedded quote-to-bind journey
- Placement-based commission allowed
- Can recommend/rank products
- Requires state-by-state licensing
- Ongoing compliance obligations
- Early handoff to licensed broker
- No user-specific quotes on marketplace
- Fee not contingent on binding
- No coverage term discussions
- Approved scripts for support staff
- SaaS / integration fee model
- Broker-branded experience
- Marketplace provides technology only
- No insurance-related user support
- Clear service agreement scope
These activities typically require producer licensing in most US states:
- Embedded underwriting intake - Collecting detailed risk information on your platform that feeds quote generation
- Displaying user-specific quotes - Showing premium amounts tied to the user's inputs, even if labeled "indicative"
- Recommending or ranking products - "Best for you," "recommended," or ordering based on user criteria
- Near-bind flows - Users can select coverage options, proceed to checkout, or reach binding steps on your platform
- Coverage term discussions - Your staff (or chatbots) explaining policy terms, exclusions, or advising on coverage
- Post-bind servicing - Handling claims, endorsements, renewals, or policy changes
Showing quotes on your marketplace + receiving placement-based compensation is the most common fact pattern that regulators treat as producer activity.
To stay in the referral-safe zone, your marketplace typically needs to:
- Collect only basic contact info - Name, email, phone for referral purposes, not underwriting data
- No quote output on marketplace - Or at most, marketing ranges ("starting at $X") not tied to user inputs
- Early handoff - User redirected to broker before any quoting or coverage selection
- No recommendations - Avoid "best," "recommended," or filtered/ranked product displays
- Non-contingent compensation - Payment per lead, per click, or flat fee—not tied to whether a policy binds
- Approved scripts only - Support staff cannot discuss coverage terms; must redirect to broker
The line between "mere referral" and "solicitation" is fact-specific. When in doubt, get a formal opinion for your specific flow.
How you're paid is strong evidence of your role:
- Commission / revenue share contingent on placement - High-risk for unlicensed recipients. Regulators view this as evidence you're "in the business" of insurance.
- Flat referral fee (not contingent) - Lower risk if paired with strict no-solicitation behavior. Payment should not depend on whether a policy binds.
- Marketing fee per lead/click - Lower risk, but structure and documentation matter. Must align with actual role.
- SaaS / tech integration fee - Lowest risk for unlicensed marketplaces. Payment for software services, not insurance outcomes.
Key principle: If your compensation goes up when more policies bind, regulators are more likely to view you as a producer.
California Insurance Code § 1631 defines who needs a license:
- "Solicit" - Attempting to sell insurance or asking/urging someone to apply
- "Negotiate" - Acting as an intermediary between applicant and insurer on coverage terms
- "Effect" - Completing a transaction that binds coverage
If your marketplace does any of these activities, you need a California producer license to operate there—regardless of where your company is incorporated.
Commission sharing: California generally prohibits paying commissions to unlicensed persons if they're involved in soliciting, negotiating, or effecting insurance. Referral fees may be permissible if the referrer does not solicit and the fee is not contingent on binding.
- UX flow review
- Compensation structure analysis
- Target state licensing assessment
- Written memo with risk tier
- Recommended operating model
- 30-min strategy call
- Everything in Perimeter Analysis
- Marketplace-Broker agreement
- Referral/tech services agreement
- Website disclosures & terms
- UX compliance guidelines
- Support script templates
- One revision round
- Unlimited agreement reviews
- New state expansion support
- Product/UX change reviews
- Broker onboarding support
- Regulatory inquiry guidance
- Priority response time
owner@terms.law