A Nutmeg State official says insurance customers would be better off if state producer licensing laws drew a clearer line between “insurance agents” and “insurance brokers.”[@@]

A model licensing act developed by the National Association of Insurance Commissioners, Kansas City, Mo., retains the “agent” designation but, by lumping agents and brokers together under the term “insurance producers,” it eliminates the clear legal distinction that Connecticut and other states once made, Connecticut Attorney General Richard Blumenthal complained Tuesday during the Senate hearing on insurance broker compensation.

Distinguishing between agents and brokers is important, because consumers believe that they are compensating a broker and that a broker represents their interests, Blumenthal said, according to a written version of his remarks.

“The model act needs significant and substantive change to restore consumer faith in the insurance industry,” Blumenthal said.

But Blumenthal said federalizing insurance regulation would be unwise. Often, he said, federal regulators seem to favor business interests over consumer interests.