Insurers and agents are hoping to put their imprint on a fingerprint model before it advances further toward adoption by state insurance regulators.
Reaction to the “Authorization for Criminal History Record Check Model Act” that currently is being considered by the Market Regulation & Consumer Affairs (D) Committee of the National Association of Insurance Commissioners, Kansas City, Mo., varies by industry segment.
Life insurance producers are urging the advancement of a fingerprint model act that would streamline the process of putting agents’ prints on file with states.
The model will help weed out “bad apples” by giving state regulators access to FBI criminal history, says Michael Gerber, vice president and general counsel with the National Association of Insurance and Financial Advisors, Falls Church, Va.
It also will streamline the fingerprinting process for producers with “a printed once, then done approach,” he says, adding that the model will encourage uniformity.
Also, Gerber says, the model calls for sufficient confidentiality protections to be established with a new NAIC central depository being anticipated as part of the act.
Indeed, the model draft requires states to have a memorandum of understanding ensuring confidentiality with any entity with which they share information. The model also states that “fingerprints and necessary identification information sent by a state commissioner to the NAIC shall not be subject to a subpoena, other than one issued in a criminal action or investigation, and shall be confidential, and not used in a civil action.”
NAIFA says another benefit is that it encourages states to obtain electronic fingerprints for new resident producers, which would allow them to obtain FBI criminal history information.
NAIFA adds that in order not to slow down the model’s advancement because of concerns over whether officers and directors should be part of this process, it would “not object” to a model limited in application to producers while separating out the officers and directors issue for further study.
The American Council of Life Insurers, Washington, in filed comments, offered 10 reasons why any central depository should fall under the purview of the National Insurance Producer Registry rather than the NAIC.
In comments filed by Michael Lovendusky, ACLI associate general counsel, ACLI says, among other things, that: NIPR control was agreed to in 2002; NIPR complies with the Fair Credit Reporting Act and state laws; fingerprint and repository costs will be kept low; and, fingerprint collection, storage and transmission are “not necessarily regulatory functions.”
Lovendusky says ACLI would have comfort with the criminal history record check of officers and directors if the central depository resides with the NIPR and not the NAIC. It is “unclear” whether the confidentiality provisions for the central depository discussed in the model will be enforceable, he adds.