In fact, though, one, the NIPR, is an industry organization. The other, the PDB, is a database of producer information.
How can companies navigate these increasingly complex entities, and simplify the process of submitting and retrieving producer information?
(Related: Follow the Money: Bankrolling the NAIC)
Recently, a major change occurred in New Mexico. That state changed its back-office system to State Based Systems (SBS). Regulators there also changed license numbers and lines of authority. The shift took several months to implement and test, before moving to production. Without these changes, transactions would not move through the NIPR Gateway. The system would produce no licenses and no appointments.
This got me thinking: Managing licensing and compliance for agents and producers has become one of the most complex aspects of the already highly technical information-gathering demands facing the insurance industry.
While I was thinking about how to tell producers how to keep up to date on agent data management, I ran into no less than five acronyms, along with a web of changing relationships and requirements. The purpose of this article is to explain the complicated workings of intrastate regulations, and to point to some ways insurance carriers and agencies can keep on top of it all.
The Birth of the NIPR
The NIPR, or National Insurance Producer Registry, was incorporated in October 1996 as a nonprofit affiliate of the National Association of Insurance Commissioners (NAIC).
One of the main purposes of creating the NIPR was to give states and territories a central repository they could use to put the demographics for the individuals and business entities that act as producers, licensing information, appointment information, and information about the actions recorded in RIRS (Regulatory Information Retrieval System) in a single database.
Before the NIPR came along, you’d have to go to each state’s website to search for a producer’s licensing and appointing data. You’d have to apply for licensure by paper. Each producer had a different license number for each state in which the producer was licensed.
Thanks to the NIPR, the licensing arena has come a long way: No more paper. No more mailing forms to the states and waiting weeks (or, sometimes, months) to receive a license or appointment.
The Rise of the NPN
Once the NIPR was created, each producer needed to have a producer number that was unique, no matter the jurisdiction. Some states tried to use the Social Security number of the individual producer as the NPN, but that created security issues. Thus the National Producer Number, or NPN, was developed.
The NIPR assigns the NPN. The NPN is the single most unique identifier an individual or business entity that acts as a producer will maintain. An NPN will never be reused, no matter how long it has been inactive. Some states have even chosen to use the NPN as their state-specific license number.
The database for NPNs is the Producer Database — the PDB.
A PDB user can generate a PDB report that gives all states’ information for a producer. This saves the licensing administrator from having to go to each state’s or territory’s website to search for an individual or business entity.