Fingerprint Model Wiped Out

She added, “I’d like direction on how much time to spend on this” because there are other issues such as producer licensing to which time could be devoted.

Longtime industry participants said they have never witnessed such a response, or rather, lack of one at the NAIC. Several said it suggests that even regulators are not comfortable with the model in its current incarnation.

After three committee meetings, the American Council of Life Insurers, Washington, is maintaining its position that it is satisfied with a point in the model that would exempt producers licensed with the National Association of Securities Dealers. ACLI also could support a model that included fingerprinting of officers and directors if data were housed with a joint regulatory-industry body, the National Insurance Producer Registry, rather than an NAIC central repository.

The ACLI, said Michael Lovendusky, associate general counsel with the ACLI, will wait to see what step regulators hope to take next but would be cautious of a proposal that did not have a central repository, but rather raised the possibility of officers and directors being required to be fingerprinted in individual states.

In a statement, the National Association of Insurance and Financial Advisors, Falls Church, Va., expressed disappointment in the lack of a motion, saying, “Our organization as well as other industry trade groups and the NAIC have invested nearly three years of time and effort to draft a model that promotes uniformity and coordination among states, and streamlines the producer licensing process.

“NAIFA hopes the NAIC, under Iowa Commissioner Susan Voss’ leadership, can revive the effort to adopt a model law for criminal background checks and that it won’t miss an opportunity to bring insurance regulation into the 21st century.”

The lack of a motion “was not surprising really, given that there was no consensus, and, it appears, no consensus on the regulatory side, as well,” said Wes Bissett, senior vice president with the Independent Insurance Agents and Brokers of America, Alexandria, Va. “If nothing more happens, we will be pleased because we are opposed to the draft,” he added.

“In most legislative arenas, this proposal would be dead. It is hard to believe that it would be pursued,” he said. The draft ended up going far beyond the scope of a December 2002 draft that simply set up requirements if states needed to get access to FBI data, Bissett explained.

Scott Cipinko, of counsel with Lord, Bissell & Brook for the Life Insurers Council, Atlanta, said the model would raise costs for small insurers with uncertain benefit.

John Fielding, a representative for the Council of Insurance Agents and Brokers, Washington, said the council supports the model and efforts to make reciprocity more complete.

He expressed surprise that after 14 drafts, the model was not advanced. It is a bit “embarrassing,” he said that after several years of work, no motion was made.