What Foreign-Founded Insurtechs Need to Know About US Insurance Licensing

Every year, insurance technology companies founded in India, the UK, Australia, Israel, and across Europe attempt to enter the US market. The US insurance distribution system is large, fragmented, and lucrative — but it is also heavily regulated at the state level, and the licensing requirements trip up foreign founders in ways that domestic founders rarely encounter.

The most common pattern: a foreign-founded insurtech builds a product, gets interest from US carriers or distribution partners, and then discovers that conducting insurance business in the US requires a licensed entity — and that licensing a US entity as a non-resident founder involves more steps than the standard guides describe.

This post covers those additional steps specifically.

The US Insurance Licensing Baseline

Any entity that wants to sell, solicit, or negotiate insurance in the United States must hold a business entity producer license in each state where it operates. This is not optional and it is not waived for foreign companies. A UK-licensed broker, an India-based insurtech, or an Australian MGA cannot use its home country license to transact US insurance business — it needs a US entity with US licenses.

The structure of US insurance licensing is state-by-state. There is no federal insurance license. You need a license in each state where you want to do business. Most entities start by obtaining a resident (home state) license and then filing for non-resident licenses in additional states.

Step 1: Forming Your US Entity as a Non-Resident

Foreign nationals can form a US LLC or corporation without being a US citizen, US resident, or physically present in the United States. This is one of the more accessible parts of the process — Delaware is the most popular state for foreign-founded entity formation because of its well-established corporate law, predictable courts, and familiarity to international investors.

What you will need:

• A registered agent in the state of formation (a US-based individual or service that accepts legal documents on your entity's behalf)
• Your entity name as you want it on the formation documents
• The names and addresses of your members or officers
• Filing fees (typically $90–$200 depending on the state)

Formation can be done remotely through the state's Secretary of State online portal or through a registered agent service. You do not need to travel to the US to form the entity.

Note: Your formation state and your insurance licensing home state can be different. Many foreign-founded entities form in Delaware but choose Texas, Florida, or Pennsylvania as their insurance licensing home state — because those states process licenses faster and have fewer friction points for entity applicants. More on this below.

Step 2: Obtaining an EIN as a Foreign National

Your Employer Identification Number (EIN) is a federal tax ID issued by the IRS. You need it to register your entity with the National Insurance Producer Registry (NIPR) and to complete most state insurance license applications.

For domestic founders, this is trivial — apply online through the IRS website and receive your EIN immediately. For foreign nationals without a US Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN), the online application is not available.

The process for foreign nationals:

• Complete IRS Form SS-4 (Application for Employer Identification Number)
• In the field asking for your SSN or ITIN, write "foreign" — this is the correct and accepted approach
• Submit the form by fax to the IRS (fax is faster than mail for international applicants)
• Wait four to six weeks for processing — the IRS will mail your EIN assignment letter

This timeline has a real impact on your overall licensing schedule. If you're planning a US market entry, apply for your EIN as early as possible — it can be the longest single wait in the process.

Some founders obtain an ITIN first (also an IRS application process, requiring a W-7 form) and use that to apply for the EIN online. If you have a US bank account, a US tax advisor, or other reasons to obtain an ITIN, this path can be faster. If you don't, the SS-4 by fax is the standard route.

Step 3: Choosing Your Insurance Licensing Home State

Your insurance licensing home state is the state where you'll apply for your primary (resident) business entity producer license. It is the foundation of your US licensing structure — non-resident licenses in other states are filed on the basis of your home state license.

For foreign-founded entities, home state selection involves a few additional considerations beyond what domestic founders face:

Exam requirements for officers. Some states require that an officer or owner of the applying entity pass a state insurance licensing exam. If your officers are located overseas and cannot easily travel to the US to sit for an exam, this matters. Most states do not have this requirement for entity officers when there is a designated DRLP — but verify your target state's rules before filing.

Background check requirements. State applications require background disclosures for owners and officers. Foreign nationals will need to disclose any criminal history in their home country, which may require obtaining a criminal background report from their country's equivalent of a national police database. This takes time to obtain in some jurisdictions — plan for it.

Processing speed. California and New York are slow regardless of your residency status — processing times of eight to twelve weeks are common. Texas, Florida, Pennsylvania, and several other states move considerably faster. For a foreign-founded entity trying to get to market, this can be a meaningful variable.

Foreign ownership disclosure. Some states have started requiring disclosure of foreign ownership or foreign government affiliation in insurance entity applications, particularly in the wake of increased CFIUS scrutiny of foreign investment in US businesses. This is still evolving, but it's worth understanding your home state's requirements before filing.

Step 4: The DRLP Requirement — and Why It's Often the Deciding Factor

Every business entity producer license in the US requires a Designated Responsible Licensed Producer. The DRLP is an individually licensed insurance producer — a specific person with an active US producer license — who is formally designated as responsible for your entity's compliance with state insurance laws.

For foreign-founded insurtechs, this is often the most significant structural question. Your founders are likely not licensed US insurance producers. You probably don't have US employees yet. But you cannot get a US entity producer license without a DRLP, and you cannot designate a DRLP without one identified before your application is filed.

The solution most foreign-founded entities use is an outsourced DRLP arrangement. Rather than hiring a US employee to serve as DRLP — which creates employment law complexity, cost, and dependency on a single person — the entity contracts with a licensed individual or firm that serves as the designated producer on an ongoing basis.

DRL Advisory provides this service for foreign-founded insurtechs, MGAs, and distribution platforms entering the US market. We hold active producer licenses across all 50 states — including P&C, A&H, Life, and surplus lines authority — and can serve as DRLP from day one of your US entity's licensing.

Step 5: Filing Your Home State License Application

Once your entity is formed, your EIN is in hand, your DRLP is identified, and your NIPR registration is complete, you file your home state business entity producer license application — typically through NIPR's online portal.

For foreign-founded entities, the application will typically ask for:

• Your entity NPN (from NIPR registration)
• Your DRLP's individual NPN
• Your EIN
• Your entity formation documents
• Background disclosure for all owners and officers above a threshold ownership percentage (typically 10% or more)
• Disclosure of any regulatory actions or criminal history in any jurisdiction

The background disclosure section is where foreign founders most often encounter unexpected friction. Criminal background reports from non-US jurisdictions sometimes need to be translated and may require authentication (apostille). Build time for this into your planning.

Common Mistakes Foreign Founders Make

Assuming their home country license transfers. It does not. A UK FCA authorization, an Australian AFSL, or an Indian IRDAI registration has no standing in the US insurance regulatory system. You need a US license for US insurance business.

Underestimating the EIN timeline. For foreign nationals using the Form SS-4 by fax route, four to six weeks is realistic. This delays your NIPR registration and your license application. Apply early.

Not having a DRLP solution before they start. The DRLP's information is required on your license application. You cannot submit without it. Don't treat this as something to figure out after the entity is formed — it needs to be resolved before you file.

Choosing the wrong home state. Forming in Delaware and defaulting to Delaware as your insurance licensing home state isn't always the right call. Delaware isn't a bad choice, but Texas, Florida, and Pennsylvania often serve foreign-founded entities better in terms of processing speed and application friction.

Overlooking non-resident licensing requirements for the DRLP. Your DRLP must hold active individual producer licenses in every state where your entity is licensed. If you plan to operate in 20 or 30 states, your DRLP needs licenses in all of them. Verify this before designating your DRLP and before applying for non-resident entity licenses.

Frequently Asked Questions

This article is for informational purposes only and does not constitute legal advice. Insurance licensing requirements vary by state and are subject to change. IRS procedures for foreign applicants may also change. For guidance specific to your situation, consult qualified US insurance counsel and a US tax advisor.