NU Online News Service, Aug. 20, 1:10 p.m. EDT

SEATTLE--The roles of race, education and personal accountability in producer licensing testing and examination were raised as regulators began hearings to consider if there is a need for a uniform process.

A working group on Producer Licensing Testing and Examination held a public hearing Tuesday on the subject during the National Association of Insurance Commissioners meeting here.

The group heard from executives dealing with life insurance agents, testing and education.

Bill Anderson, senior vice president of state government relations for the National Association of Insurance and Financial Advisors, and Thomas Harris, senior vice president for The Penn Mutual Life Insurance Company, spoke about the need to meet the growing demand for licensed agents in their industry. However, when it comes to test scores, the rate of passing the examinations varies widely from state to state.

Mr. Harris produced statistics he said illustrating that the passing rate differs substantially from state to state, with Illinois having the most successful rate of passage with a variance of some 40 percent between it and the rest of the country.

The statistics, he said, show that minorities, who are substantially under-represented in the agency workforce, also have a very low rate of passing the producer tests.

"An agent's chance of getting a license depends more on where they live than what they know," he explained.

Martin M. Shapiro, a professor at Emory University, who deals with the effects of race in testing, said elements in tests can adversely affect minorities' test scores and redesigning the tests can lead to a higher rate of passage while still preserving the quality of the individuals the tests are meant to produce.

However, the assumption that race plays a role in producing lower scores was refuted by Luther Ellis, associate deputy commissioner with the District of Columbia Department of Securities and Banking, and Ron Henderson, a director with the Louisiana Department of Insurance.

Both regulators said personal responsibility and adequate education play more of a role in passing the tests than any other factor.

Robert Commodore, senior director of consumer and industry services for the insurance department in Minnesota, said standards should not be lowered for the education and testing of any producers, especially life, calling it a "scary" proposal.

He said the test score statistics reflected similar scores on the society as a whole and cautioned that the working group should not be trying to make major corrections to what is in fact a very minor problem.

He said it was important to raise the level of auditing of education courses to make sure individuals are getting the adequate amount of educational time needed.

Individuals representing the test developers and education providers said they use standardized systems in their work and deliver products under the mandates of the individual states. They said nothing in their work has been designed to skew the results in any direction.

After the hearing, committee chairwoman, Anne Marie Narcini, chief of market regulation with the New Jersey Department of Insurance and Banking, said the meeting was the beginning of research into education and testing to determine how extensive the problems are and what remedies need to be developed.

She said members of the property-casualty insurance business were contacted, but showed no interest in submitting testimony. At this point, she said the group has no idea if the p&c side has a problem or if any remedies are needed.

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Questions Raised Over Producer License Testing & Education

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