NY Producer License Bill Final Okay Nears

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By Daniel Hays

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NU Online News Service, Sept. 19, 4:02 p.m.EDT?New York in the next several weeks is expected tobecome the latest state to adopt a reciprocal licensing law fornon-resident insurance producers, an Assembly source said.

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On Tuesday, the New York State Senate passed the state's versionof a model licensing bill during a one-day special session.

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The final language in the bill was the result of a three-waynegotiation involving leadership of the Republican-controlledSenate, Democrat-controlled Assembly and Republican Gov. GeorgePataki, said Peter Newell an aide to Assemblyman Alexander "Pete"Grannis, D-Manhattan, who chairs the Assembly InsuranceCommittee.

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Mr. Newell said the next session of the Assembly should bescheduled within a couple of weeks and "when we return we expect it[the bill] to pass."

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The Independent Insurance Agents & Brokers of New York Inc.based in Syracuse, N.Y. called the action on the bill a"breakthrough moment" in the drive to adopt reciprocal laws for thelicensing of non-resident insurance producers throughout thenation.

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IIABNY said it had been involved in negotiations with bothchambers over two years to secure the measure. IIABNY also said itis confident the three-way agreement "will culminate in Gov. GeorgePataki bill signing before the end of the year."

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Enactment of the legislation, IIABNY said, will streamlinelicensing procedures for New York's agents and brokers to conductbusiness in other states by requiring reciprocal treatment.Non-resident insurance producer licenses would be granted only tonon-residents whose home state grants non-resident licenses to NewYork residents on the same basis.

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It will also exempt insurance company customer servicerepresentatives and other employees who regularly deal withpolicyholders from completing licensing standards.

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"This bill will make it easier for insurance company employeesto provide needed service to policyholders, while still protectingNew York consumers by maintaining producer licensing standards,"said Gerald L. Zimmerman, assistant general counsel for theNational Association of Independent Insurers.

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Sponsored by Sen. James L. Seward, R-Oneonta, the bill, S-5729,generally adopts the National Association of InsuranceCommissioners model for licensing of insurance producers to sell orsolicit insurance in New York who are licensed in another state.The bill also provides for limited lines licensees, permits sharingof confidential material among regulators, and repeals provisionsrelating to reinsurance intermediaries and non-resident excess linebrokers.

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Under the Gramm-Leach-Bliley Act of 1999, also known as theFinancial Services Modernization Act, 29 states were required toenact licensing reciprocity to avoid the creation of a federalproducer licensing system. IIABNY noted that while that goal wasmet, New York had remained among a few large holdout states withouta reciprocity law in place.

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"The ultimate goal of licensing reciprocity is to reduce thecost and complexity of regulatory compliance as it relates tomulti-state licensing," says Maura T. Clancy, IIABNY boardchairman. "An unwieldy process acting as a barrier to conductingbusiness across state borders should be a thing of the past. TheSenate's vote this week brings us an important step closer to thatreality."

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