Final answer:
Insurance contracts can only be handled by an insurance producer with an occupational license, which is obtained by completing specific education or tests as required by governmental agencies.
Step-by-step explanation:
In the context of insurance contracts, an insurance producer may sell solicited or negotiated insurance contracts only after obtaining a license. Insurance contracts may be sold, solicited, or negotiated by an insurance producer only upon obtaining a license. An occupational license indicates that a professional, including insurance agents, has completed specific education or passed a test required by government agencies. It's a necessary credential for various professionals to ensure that they possess the skills and knowledge to provide their services legally and professionally. In the context of insurance, separating potential clients into risk groups is essential to manage the risk of adverse events and determine premium rates.