Uniform Reciprocal Licensing Act

Definition of 'Uniform Reciprocal Licensing Act'


A law that regulates unlicensed insurers. The uniform reciprocal licensing act allows the insurer's home state to revoke the insurer's license if deemed that they were unlicensed and doing business in another state. Insurance companies must be registerd and be licensed under the state they operate in.

Investopedia explains 'Uniform Reciprocal Licensing Act'


This act is used to protect the citizens of the state by ensuring the insurance companies are aware of and follow the regulations set out by the state they live in. It also exists to protect legitimate insurers from price undercutting by unlicensed insurance companies. Not all insurance companies fall under this act however, a few exceptions include reinsurers.



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