A review of how states are complying with uniform producer licensing standards shows high compliance on 26 of 37 benchmarks, according to the National Association of Insurance Commissioners.
"This self-assessment outlines where we stand today in terms of compliance with the Gramm-Leach-Bliley Act's reciprocity requirements and uniform resident licensing standards," said New Hampshire Insurance Commissioner Roger Sevigny, who chairs the NAIC/Industry Producer Licensing Coalition.
"It also provides an independent legal review and on-site peer assessment of our licensing laws, regulations, practices and processes," added Mr. Sevigny, who is president-elect of the Kansas City, Mo.-based NAIC.
The NAIC conducted the review via a team of volunteer regulators who visited 52 jurisdictions to examine compliance with 2002 NAIC reciprocity standards among states. The standards were developed so that states would be in compliance with the Gramm-Leach-Bliley Act of 1999, which required states to establish reciprocity to avoid establishment of a federal licensing body–the National Association of Registered Agents and Brokers.
The NAIC team defined "high compliance" as fulfillment of the standard by 35 or more states. The NAIC also checked on how states are using electronic tools to ease the licensing process.
The Feb. 19 NAIC report also pointed out as an indicator of success the fact that in an effort to address privacy concerns and move away from state-specific licensing numbers, 47 states have dropped the use and disclosure of Social Security numbers, and have implemented–through its affiliate, the National Insurance Producer Registry–the use of a National Producer Number.
In addition, according to the report, 45 states have implemented NAIC's electronic, centralized Address Change Request system, through which a producer may notify all appropriate states.
Appointment and termination enhancements have also been put in place, with 41 states using NAIC/NIPR to electronically process appointments and terminations, while six states (and soon to be more) electronically proces appointment renewals. Only two other states require appointment and termination transactions, but do not leverage NIPR.
Consumer protection–an area insurance commissioners point to as a key reason why state regulation needs to be retained, rather than relying on a federal system–has been enhanced by a state tracking system, according to the NAIC report.
The NAIC team found that among noncompliant states, there was a willingness to move toward compliance. However, some reported legislative hurdles, the interpretation of uniform licensing and lack of concern among the local industry regarding noncompliance as reasons for moving slowly toward full compliance.
Read the detailed report in the Feb. 25 edition of National Underwriter.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.