NAIC Fingerprint Rule Draws Industry Objections
Regulatory efforts to streamline the process of criminal background checks have some industry representatives objecting to the system of fingerprinting producers and others.
The new model act, sponsored by the National Association of Insurance Commissioners, based in Kansas City, Mo., aims for states to gain access to the FBIs criminal records and help weed out potential rogue producers. It would also allow states to use a central repository for fingerprint information, which now exists in the form of the National Insurance Producer Registry under the aegis of the NAIC.
The model act could receive NAIC approval by the end of the year. However, some industry representatives feel portions of the model act may be premature until the technology is in place for universal electronic fingerprinting.
Lenore Marema, vice president of the Property Casualty Insurers Association of America in Des Plaines, Ill., said her group objected to the provision requiring regulators to mandate a full set of fingerprints from each producer license applicant. "We think the NAIC is putting the cart before the horse in setting forth, in Section 4, all of the persons and circumstances under which states will require fingerprints and a criminal background check prior to the time that the NAIC has a fully operational central repository for digital fingerprints to coordinate that process," she said.
Ms. Marema also objected to the language in the model that could be interpreted to require criminal background and fingerprinting of company officers where there is a request for an additional line of authority.
The Washington-based National Association of Insurance and Financial Advisors supports the current model with a number of provisos, the most important being that the model act not allow for the fingerprinting of nonresident license applicants. "Where a resident state conducts a background check, including obtaining and vetting fingerprints, there is no reason for a nonresident state to duplicate the process in connection with the same producer," William Anderson, NAIFA senior vice president, said in a statement.
Reproduced from National Underwriter Edition, August 12, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.
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