Agent License Reform Incomplete, Says CIAB Head

The head of a major agent-broker group applauded official acknowledgement that states have headed off federal involvement with insurance producer licensing, but warned that major licensing problems remain.

Four of the largest states have failed to take proper action to permit reciprocal licensing, noted Ken A. Crerar, president of the Washington-based Council of Insurance Agents and Brokers.

His comments followed action in New Orleans, where the National Association of Insurance Commissioners convened earlier this month and officially certified that 35 jurisdictions have met the reciprocity threshold established in the NARAB provisions of the Gramm-Leach-Bliley Act–six more than the minimum necessary of 29.

Under GLB, if that minimum of 29 had not met standards providing for reciprocal treatment of non-resident producers by Nov. 12, a federal takeover of licensing procedures would have ensued through creation of a National Association of Registered Agents and Brokers.

Crerar said the council congratulated the states that were certified by the NAIC, and commended NAIC President Terri Vaughan and Vice President Mike Pickens for their leadership on the producer licensing issue. CIAB, he said, also applauded the National Council of Insurance Legislators and other state lawmakers for making producer-licensing reform a priority issue.

However, “while great strides have been made over the past few years to streamline and simplify the nonresident producer licensing system, some large hurdles remain,” he said.

“Several of the largest licensing jurisdictions have not yet complied with NARAB reciprocity provisions,” he noted. “New York and Pennsylvania are still working on reform legislation, while California and Florida recently enacted legislation that does little or nothing to move those states toward reciprocity. These four states alone account for nearly 30% of the insurance marketplace.”

He said that “until thelicensing quagmire is fixed, multistate producers will continue to face problems in getting licensed in all licensing jurisdictions–problems that divert productivity from the business of serving consumers.”

Crerar took note of the fact that the NAIC at its meeting discussed uniform resident licensing requirements, addressing several areas not included within the NAICs Producer Licensing Model Act. He said his group looked forward “to sustained momentum over the next several years to break down the remaining licensing barriers facing our nations multistate insurance producers.”

E.E. Mazier is an assistant editor of NUs Property & Casualty/Risk & Benefits Management edition.


Reproduced from National Underwriter Life & Health/Financial Services Edition, September 23, 2002. Copyright 2002 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.