It's Official: States Hit Reciprocity Goal

By E.E. Mazier

NU Online News Service, Aug. 12, 4:22 p.m. EST?Thirty-five or more states are now in compliance with the reciprocity requirements of the federal Gramm-Leach-Bliley Act, a National Association of Insurance Commissioners subgroup has determined.

The NAIC's National Association of Registered Agents and Brokers (NARAB) Working Group said it is recommending that at least 35 states be certified as meeting GLB's reciprocity requirements for non-resident producer licensing. The NAIC added that it expects more states to achieve reciprocity later this year and next year.

Under GLB, 29 states must meet standards that provide for the reciprocal treatment of non-resident producers by Nov. 12, 2002. Failure to meet that requirement would lead to a federal takeover of licensing procedures.

State insurance regulators had assigned the NARAB Working Group the task of monitoring efforts by state legislatures to enact the NAIC's Producer Licensing Model Law, which was designed to help the states comply with GLB.

The announcement today is the culmination of 15 months of analyzing producer licensing laws and practices throughout the states, the NAIC said. The working group will present its recommendation to the full NAIC membership at the group's Fall National Meeting in New Orleans next month, the NAIC said.

NAIC Vice President and Arkansas Insurance Commissioner Mike Pickens, who also serves on the NARAB Working Group, declared, "This is a huge victory for state regulation. It once again demonstrates that we can work together to achieve a common goal."

The Independent Insurance Agents & Brokers of America, of Alexandria, Va., hailed the NAIC announcement as "very positive news."

While stressing that agents and brokers in every state must be reciprocal in their licensing, Robert A. Rusbuldt, IIABA chief executive officer, said, "This prelude to full NAIC certification is a big step in the right direction, and the reciprocity adopted by these states is a significant improvement over the system before GLB."

Mr. Rusbuldt added that "today's certification, while the first step in the NAIC's deliberative process, is significant, but much more must be done." He promised that "IIABA will not rest" until all 51 jurisdiction?counting the District of Columbia?have full reciprocity. "The ultimate goal is licensing uniformity," he stated.

To establish reciprocity under GLB, states were required to pass a four-step test:

? Permit a producer licensed in their home state to sell in nonresident states after satisfying only minimum requirements such as submission of licensing application and payment of all applicable fees.

? Accept the satisfaction of the producer's home state's continuing education requirements.

? Not limit or condition producer's activities because of residence or place of operations (except that countersignature requirements are still permitted).

? Grant reciprocity to all other states meeting these reciprocity requirements.

Special Reports /

It's Official: States Hit Reciprocity Goal

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