N.Y. Producer License Bill Nears Final OK
New York in the next several weeks is expected to become the latest state to adopt a reciprocal licensing law for nonresident insurance producers, a state Assembly source said.
Last month, the New York State Senate passed the states version of a model licensing bill during a one-day special session.
The final language in the bill was the result of a three-way negotiation involving leadership of the Republican-controlled Senate, Democrat-controlled Assembly and Republican Gov. George Pataki, said Peter Newell, an aide to Assemblyman Alexander “Pete” Grannis, D-Manhattan, who chairs the Assembly Insurance Committee.
Newell said the next session of the Assembly should be scheduled within a couple of weeks, and “when we return, we expect [the bill] to pass.”
The Independent Insurance Agents & Brokers of New York Inc. based in Syracuse, N.Y., called the action on the bill a “breakthrough moment” in the drive to adopt reciprocal laws for the licensing of nonresident insurance producers throughout the nation.
Enactment of the legislation, IIABNY said, will streamline licensing procedures for New Yorks agents and brokers to conduct business in other states by requiring reciprocal treatment. Nonresident insurance producer licenses would be granted only to nonresidents whose home state grants nonresident licenses to New York residents on the same basis.
The legislation will also exempt insurance company customer service representatives and other employees who regularly deal with policyholders from completing licensing standards.
Sponsored by Sen. James L. Seward, R-Oneonta, the bill, S-5729, generally adopts the National Association of Insurance Commissioners model for licensing of insurance producers to sell or solicit insurance in New York who are licensed in another state.
Under the Gramm-Leach-Bliley Act of 1999, 29 states were required to enact licensing reciprocity to avoid the creation of a federal producer licensing system. IIABNY noted that while that goal was met, New York had remained among a few large holdout states without a reciprocity law in place.
“The ultimate goal of licensing reciprocity is to reduce the cost and complexity of regulatory compliance as it relates to multistate licensing,” said Maura T. Clancy, IIABNY board chairman. “An unwieldy process acting as a barrier to conducting business across state borders should be a thing of the past.”
is an associate editor of NUs Property & Casualty magazine.
Reproduced from National Underwriter Life & Health/Financial Services Edition, October 3, 2003. Copyright 2003 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.