Objections Raised To NAIC Fingerprinting

By Steven Tuckey

NU Online News Service, Aug. 10, 2:04 p.m.EDT?Regulatory efforts to streamline the process ofcriminal background checks have some industry representativesobjecting to the system of fingerprinting producers andothers.[@@]

The new model act, sponsored by the National Association ofInsurance Commissioners, based in Kansas City. Mo., aims for statesto gain access to the FBI's criminal records and help weed outpotential rogue producers.

In addition, it would allow states to use a central repositoryfor fingerprint information, which now exists in the form of theNational Insurance Producer Registry under the aegis of theNAIC.

The model act could receive NAIC approval by the end of theyear.

However, some industry representatives feel portions of themodel act may be premature until the technology is in place foruniversal electronic fingerprinting.

Lenore Marema, vice president of the Property Casualty InsurersAssociation of America, said that her organization objected to theprovision requiring commissioners to mandate a full set offingerprints from each producer applicant.

"We think the NAIC is putting the cart before the horse insetting forth, in Section 4, all of the persons and circumstancesunder which states will require fingerprints, and a criminalbackground check, prior to the time that the NAIC has a fullyoperational central repository for digital fingerprints tocoordinate that process," she said.

Ms. Marema also objected to the language in the model that couldbe interpreted to require criminal background and fingerprinting ofcompany officers where there is a request for an additional line ofauthority.

The National Association of Insurance and Financial Advisorssupports the current model with a number of provisos. The mostimportant of these is that the model act not allow for thefingerprinting of non-resident license applicants.

In a statement, William Anderson, NAIFA senior vice president tothe NAIC Fingerprint Subgroup of the Producer licensing WorkingGroup, said, "Where a resident state conducts a background check,including obtaining and vetting fingerprints, there is no reasonfor a non-resident state to duplicate the process in connectionwith the same producer."