If you’re planning to become a licensed insurance agent in California – or if you’re an agency owner looking to hire new producers – you’ve probably heard the news: starting January 1, 2026, California is eliminating the 20-hour pre-licensing education requirement for most insurance licenses.
On the surface, this sounds like great news. Fewer hours of required coursework means you can get licensed faster and start working sooner, right?
No. In fact, there’s a risk that it could be even harder. We’ll explain in a moment.
But the most important takeaway is this:
This change doesn’t mean licensing just got easier – it means the process just got more flexible, and if you don’t approach it strategically, you could end up wasting time, money, and effort.
Here’s what California’s new law actually changes, what it doesn’t change, and what you need to do to get licensed in 2026 and beyond.
What the Law Actually Changes
On October 10, 2025, Governor Newsom signed Assembly Bill 943 into law. Effective January 1, 2026, this law repeals the requirement for insurance producer license applicants to complete 20 hours of prelicensing education.
Here’s what that means in practice:
Prior to January 1, 2026, if you wanted to get licensed in California as a property and casualty agent, you had to complete 52 hours of prelicensing education: 20 hours of line-specific coursework, 20 hours of general insurance principles, and 12 hours of ethics and California Insurance Code. For a life agent license, you had to complete 32 hours: 20 hours of line-specific coursework and 12 hours of ethics and California Insurance Code.
Starting January 1, 2026, those 20-hour and 40-hour requirements are gone. The only mandatory prelicensing education you need to complete is the 12-hour Code and Ethics course.
This applies to the following license types:
- Property
- Casualty
- Commercial Lines
- Personal Lines
- Limited Line Automobile
- Life
- Accident and Health (Disability and Health)
It does NOT apply to bail agents or public insurance adjusters – those licenses still require the full 20 hours of prelicensing education.
MOST IMPORTANT: “Fewer Requirements” Does NOT Mean “Easier Licensing”
Here’s where things get confusing, and where a lot of people are going to make costly mistakes or find themselves in an even worse position that before.
Just because the 20-hour prelicensing requirement is gone doesn’t mean the licensing process got easier. You still have to pass the same state insurance exam. The exam hasn’t changed. The knowledge required hasn’t changed. The passing standards haven’t changed. As many as 60% of potential insurance agents failed the exam back when prelicensing was required. That number is going to be more likely to increase, not decrease, when agents are no longer required to complete the prelicensing study materials.
What’s changed is that California is no longer mandating that you sit through a specific number of hours of coursework before taking the exam. They’re trusting you to prepare yourself adequately – however you choose to do that.
Think of it this way: if you were required to take a 40-hour driver’s education course before getting your license, and then the state said “actually, you don’t need to take the course anymore, just pass the driving test,” that doesn’t mean driving got easier. It means you’re now responsible for making sure you’re prepared.
The same principle applies here. You still need to master the material covered in the exam. The difference is that now, you have more flexibility in how you learn it – but you also have more responsibility to ensure you actually do learn it.
What You Still Have to Do
Let’s be very clear about what hasn’t changed:
- You MUST complete the 12-hour Code and Ethics course – This is non-negotiable. You cannot get licensed without it. This course can be taken online or in person, but it must be completed before your license can be issued.
- You MUST pass the state insurance exam – The exam is the same as it’s always been. It covers all the Educational Objectives published by the California Department of Insurance. If you don’t pass, you don’t get licensed.
- You MUST submit fingerprints – After passing your exam, you must complete a background check before you can submit your license application.
- You MUST apply for the correct license lines – Make sure you’re applying for all the authority lines you qualify to hold (e.g., both property and casualty, or both life and accident and health). This is important because adding lines later requires additional steps.
- This does NOT affect continuing education – If you’re already licensed, your continuing education requirements haven’t changed. This law only applies to new license applicants.
If you are an agency that hires someone to be an agent, in the past, the prelicensing courses could guarantee that your potential employee was learning the exam material, because they were required to complete X number of hours. Now, you have to make sure they’re learning. In many ways, this may end up being more work.
This Change Might Actually Make Licensing Harder for Some People
Here’s the part no one is talking about: for some people, removing the structured 20-hour coursework requirement is going to make licensing more difficult, not less.
The 20-hour courses weren’t just arbitrary busywork. They were designed to teach you the material you need to know to pass the exam. They provided structure, guidance, and a clear path through the content. If you’re someone who learns best with structured instruction, deadlines, and a curriculum that breaks concepts down step by step, losing that structure could hurt your chances of passing the exam.
Without the mandatory coursework, you’re now responsible for:
- Finding study materials – The Department of Insurance publishes License Examination Objectives for each license type, but those are just outlines. You need to find resources that actually teach the material.
- Creating your own study plan – No one is telling you what to study or when. You have to figure out how to cover all the exam content on your own.
- Staying disciplined – Without required coursework and deadlines, it’s easy to procrastinate, skim material, or convince yourself you’re ready when you’re not.
For self-motivated learners who are good at independent study, this is great. For people who need structure, accountability, and guided instruction, this change could lead to more failed exams, more retakes, and more frustration.
LyteSpeed Learning will still have all of these courses available, but you may now need to make sure that they’re actually studying the material. Without the mandatory time requirements, that is harder to guarantee.
What You Should Actually Do to Prepare
Just because the 20-hour requirement is gone doesn’t mean you should skip education entirely. Here’s what the California Department of Insurance recommends – and what makes sense if you actually want to pass your exam:
- Review the License Examination Objectives – These are available on the Department of Insurance website under “Education Provider Information, License Examination Objectives.” Read through them carefully so you understand exactly what topics the exam will cover.
- Find a Quality Education Provider – Even though the 20-hour courses are no longer required, many education providers still offer comprehensive exam prep courses. These courses may not be mandatory, but they’re still valuable. Look for providers who offer courses that align with the exam objectives for your specific license type.
- Don’t Skip the Studying – The temptation will be to think “I don’t have to take a course, so I’ll just wing the exam.” Don’t do this. The pass rate for California insurance exams isn’t 100%, and failing means paying to retake the exam, delaying your ability to start working, and wasting time.
- Complete the 12-Hour Code and Ethics Course Early – Don’t wait until after you pass your exam to take this course. Completing it earlier gives you foundational knowledge about California insurance law that will actually help you on your exam.
Agencies that have worked with LyteSpeed Learning in the past should still strongly consider recommending or requiring exam prep, as it one of the only ways to ensure that you’re new hires are getting the material they need.
If you are someone thinking about becoming a new agent, know that even with the prelicensing requirements, a plurality if not a majority of students struggle with the difficult test. It is highly recommended you continue to use exam prep and prelicensing course materials, to give yourself the best opportunity to succeed.
The Bottom Line
California’s new insurance licensing law removes barriers and gives you more flexibility in how you prepare for your exam. But flexibility isn’t the same as ease. You still need to master the same material, pass the same exam, and meet the same standards.
If you approach this strategically – by studying the exam objectives, utilizing LyteSpeed’s education resources, and taking preparation seriously – this change can help you get licensed faster without sacrificing your readiness.
If you treat this as an opportunity to skip education and rush through the process, you’re setting yourself up for failure.
The path to licensing just got more flexible. Make sure you use that flexibility wisely.
If you have questions about the new licensing requirements, what education you should complete, or how to prepare for your exam, reach out today. We’re here to help you navigate this transition and set yourself up for success.
