Maryland Life and Health Insurance License Practice Exam

If an insurance producer renews their license application before expiration, what will happen to the current license?

1. It becomes inactive

2. It remains in effect until a new one is issued

3. It is immediately voided

4. It automatically upgrades

The correct answer is: It remains in effect until a new one is issued

When an insurance producer renews their license application before the license's expiration, the current license remains in effect until a new one is issued. This is critical because it ensures continuity of the producer's ability to operate and provide services without any interruptions due to a lapse in licensure. The process is designed to facilitate a seamless transition from the old license to the renewed one, allowing producers to maintain their active standing and continue to serve clients without any legal hindrances. Thus, as long as the renewal application is submitted on time, the existing license stays valid throughout the review and processing period of the renewal application. This provision helps to support ongoing business operations and protect consumers by ensuring that licensed producers are always available to provide insurance services.