As surplus lines associations push for federal legislationreforming and modernizing regulation of the surplus insurancemarket, they are keeping a close eye on state producer licensingissues, representatives say.

Mark Rothert, senior vice president of the Western Region forthe American Association of Managing General Agents, said "thereare some changes the NAIC [National Association of InsuranceCommissioners] is talking about in regards to uniformity inproducer licensing, continuing education and other regulatoryissues that cross over state lines."

As his group meets with state regulators, according to AAMGAExecutive Director Bernd Heinze, "our goal is to educate them onthe unique and innovative marketplace of the wholesale industry,and to allow consumers to have greater access and protections tothe innovative lines of business that managing general agents like[Mr. Rothert] offer."

Richard Bouhan, executive director of the National Associationof Professional Surplus Lines Offices, Ltd. in Kansas City, Mo.,said NAPSLO plans to work toward passage of insurance producerlicensing reform legislation that eliminates red tape andfacilitates the easy acquisition of nonresident licenses forsurplus lines brokers.

NAPSLO wants to "make certain that the surplus lines communityhas a voice in the implementation and governance of thisprocess."

AAMGA said it specifically supports legislation recreating aNational Association of Registered Agents and Brokers. Such a bill(H.R. 5611) passed the House last Sept. 17--too late for action inthe Senate. The bill would set up a national system to createuniform nonresident agent licensing.

NAPSLO also wants a more efficient "national" licensing systemfor surplus lines brokers, and is asking the NAIC to withdraw itsposition that nonresident surplus lines brokers also must have anonresident agent or broker license before the state can issue anonresident surplus broker license.

"The result of this 'requirement' is that a surplus linesbroker, operating on a nationwide basis, may have to secure andmaintain up to 150 separate licenses to conduct surplus linesbusiness," explained Steve Stephan, director of governmentrelations for NAPSLO. "Nonresident surplus lines licenses were notavailable, except in six states, until after the enactment of theGramm-Leach-Bliley (GLB) Act in 1999, which was, in part, aimed atsolving this lack of nonresident license availability," hesaid.

"Unfortunately, as the NAIC and the states have implemented thenonresident surplus lines license provision of GLB, the 'cure' hasbecome worse than the disease," he added. "NAPSLO wants to have theintent of GLB be fulfilled, and the requirement for multiplenonresident licenses be eliminated."