Going for 50: nationwide online producer licensing is just a few states away.
That was before the National Association of Insurance Commissioners partnered with the industry in 1996 to form the National Insurance Producer Registry--an electronic system designed to facilitate multistate licensing, appointments and other producer-related business--as an alternative to a proposed federal National Association of Registered Agents and Brokers.
Ten years later, NIPR is poised to reach its ultimate goal of becoming a one-stop, centralized licensing venue for agents across the United States, including the District of Columbia and Puerto Rico.
"We're entering a new era with NIPR. It's been around now close to a decade, and like any group or organization, it's had its growing pains," said Wes Bissett, an NIPR board member and senior vice president for government affairs and state relations for the Independent Insurance Agents and Brokers of America. NIPR has evolved from a mostly company-focused organization to one that is more clearly tuned in to the multifaceted needs of producers, he said.
"It's really developed into an incredibly effective enterprise. We're seeing increasing enhancements in the actual agent services that are provided," Bissett said. "A lot of the early focus of NIPR was on company-related activities."
A company could post the appointment of an agent, notify an insurance department about a termination of an agent, or simply use the computer database to keep track of an agent. NIPR has increased its focus on producer-specific activities in just the past couple years, Bissett said.
"It's expanded to the licensing arena, to handling resident and nonresident licensing activities and providing services for both departments and the private sector," he said. "That's been a big boon."
The Act of Creation
NIPR is a byproduct of the Gramm-Leach-Bliley Financial Services Modernization Act, approved in 1999 as a final congressional attempt to enact nationwide regulatory standards. The act mandated the creation of a National Association of Registered Agents and Brokers if a minimum of 29 states could not pass basic reciprocity provisions for agent licensing by November 2002. Had that happened, state regulators would have been stripped of much of their authority over agent and broker licensing.
And so the NAIC created NIPR as an affiliate company: a network linking states and the industry for the electronic exchange of producer licensing information and a central database of producer information.
"We've gotten bigger, increasing our transactions," said Maryellen Waggoner, executive director of NIPR in Kansas City, Mo. She has been on the NIPR board since its inception. The group's 25-millionth transaction came over in November. "We had 5 million transactions between January and the first part of November. We've got a lot of growth going on."
NIPR now has two main products: the Producer Database and the NIPR Gateway.
The PDB is an electronic catalog of producer licensing and regulatory action information available to companies and other information providers through subscription. It covers insurance producers in all 50 states, the District of Columbia and Puerto Rico. States provide information to the NAIC, which in turn provides it to NIPR. If a state took action against an agent or broker, that information would be listed on the NAIC Web site (www.naic.org) under "National Insurance Producer Registry" and "producer."
"Anyone with permissible purpose can come into the PDB and look for a producer, and can ensure themselves that the producer is licensed and in good standing in their home state," Waggoner said. "The information includes adjudicated regulatory actions."
Producers also can access their own information. The PDB, which is subject to the Fair Credit Reporting Act, is limited to providing information from only the past seven years. State insurance departments use a separate NAIC database accessible only for regulatory purposes, and while it contains information similar to the PDB, it is not subject to the Fair Credit Reporting Act and can therefore host more than seven years' worth of information. Information is updated daily.
The NIPR Gateway is a communication tool between the insurance industry and the states. There are several types of transactions, with electronic appointments and terminations being the first offered.
"In the early 2000s we issued nonresident licensing of the states that do appointments and terminations; there are nine who don't," Waggoner said. "We have all but two states doing electronic appointments through the NIPR Gateway."
Mississippi was to start doing electronic appointments via the NIPR Gateway in January. For that state, it's been a matter of resources, as each state insurance department must be able to hook up with NIPR's programs. Massachusetts, which has been building its own proprietary electronic appointment system, is expected to join the Gateway by the end of 2006.
The current Gateway challenge is that not every state is on board with every product. "We're trying to get as many states as we can on these programs, specifically nonresident licensing," Bissett said. "As more states come on board, the entire enterprise system becomes more effective."
"Four years ago, there were four states on; now we've got 40 states, and somebody who wants to get licensed around the country can come in and fill out one form and pay with one check, and be licensed in all 40 of those jurisdictions," Waggoner said. She anticipated adding three more states to the Gateway by year-end 2005. "I do think we've turned a corner on how it's being accepted. When you get 40 states on board, that really speaks volumes to everyone. It says, 'This is the way we're going.'"
Part of the delay has been getting long-time agents and brokers who are more used to pen-and-paper licensing than keyboard-and-mouse, to embrace modern technology. "I think you're seeing more willingness on the part of them; everybody is getting used to doing things electronically," Waggoner said.
As a former deputy insurance commissioner in Colorado, Waggoner used to conduct yearly vendor surveys asking, "Would you be willing to do this electronically?"
"Less than 50% of vendors replied 'yes' back in 1996," she said. "Now everybody is doing this electronically. You've got new people coming in who are used to doing it that way."
Some states are actually mandating that insurers file applications electronically, Waggoner added. "If there's somebody that's reluctant, pretty soon they're going to have to get on the bandwagon."
The system will really take off when NIPR can offer nonresident renewals in a significant number of states, Bissett said. NIPR statistics show some 3 million individual licensed entities nationwide.
"Once we are able to offer those entities the ability to renew online, we'll be able to see agents and brokers take advantage of NIPR in a really significant way," Bissett said. "We're on the cusp of reform, and things are happening that are improvements that we could not have anticipated 10 years ago."
Right now NIPR's two highest-volume areas are PDB look-ups, and appointments and terminations, Waggoner said. Three states also are doing appointment renewal invoicing.
"When NIPR started out, all it was was the database: a centralized place where all the information was available to the industry," Waggoner said. "Development of the Gateway was the second piece. Appointments and terminations were added. Then it was expanded by adding these additional licensing functions."
NIPR's third product was rolled out last year: nonresident renewal, currently available in 16 states, she said. "We're adding more all the time," Waggoner added. "It's going quicker than nonresident licensing because we've done it. It's simpler and easy for the states to participate."
The main stumbling block, she said, is not resources but time to get the program going.
"I'm anticipating by the end of 2006 to have 30 or so states on nonresident renewals," Waggoner said, adding that some states do not do nonresident renewals. "We made significant progress in 2005, and we'll make additional progress in 2006. We will be up to about 18 [states] by year-end, and add another 10 or 12 in 2006."
NIPR plans to enhance the Gateway network with an Address Change Request application to be online around mid-2006 or possibly into September. The application, which is the product most requested by agents and brokers, also will help agents become compliant, Waggoner said.
State standards require 30 days' notice of compliance, and with an instantaneous address update across multiple states, agents who relocate will easily be able meet that compliancy.
Producers have been asking for a national electronic address change service for years, said Mike Koziol, assistant vice president and counsel for the Property Casualty Insurance Agents of America in Des Plaines, Ill. Such changes affect companies more so than individual agents, he said.
"We have a lot of companies that have producers that are staff producers for the company. The company has to file for their employees who are producers" Koziol said.
NIPR is doing a great job, he added, but one that could be improved upon easily.
For example, NIPR plans to launch the address change request when all 50 states are on board. Why not allow any states that are compliant with NIPR's Gateway to start using it now? he asked. The problem, as Koziol sees it, is bureaucracy: a handful of non-compliant states are being given veto power over a system that would benefit the others.
"It comes down to, 'What is good regulation?'" he said. "If it speeds it up in say, 49 states, why should one state be able to hold everybody back?
"It's non-efficient," Koziol added. It would be different if the product were handling sensitive information, like criminal background checks, he said: "But it's not. It's 'Where do you live?'"
IIABA's initial focus on NIPR was nonresident licensing, Bissett said: "We find through our own internal surveys that agents are increasingly operating through multiple states. Obtaining licenses is more important than it ever has been. NIPR offers the hope and possibility that [agents] will be able to obtain nonresident licensing in an efficient way."
The IIABA and its membership also view NIPR as a stepping stone away from potential federal regulation, which they oppose. Bissett is hopeful that use of NIPR will eventually reduce the need for a proposed optional federal charter.
"If NIPR can make licensing more significant, the need for federal regulation will ultimately fall by the wayside," Bissett said. "This is just one area, but things like NIPR have an effect on these broader debates about state or federal regulations."
Despite its gradual growth, NIPR members say it is a successful enterprise. "NIPR has become an important licensing tool for agents," Waggoner said. "In the past, they had to go to 50 different states to get their licensing taken care of, and now they can go to one place to get it done, paying by one check. That's kind of a no-brainer."
"It's working to achieve the goals that it did set out to achieve," Bissett added. "A lot of work still needs to be done, but we're on the right path. We're not there yet, but we're on our way."
* The National Insurance Producer Registry is heading toward its goal of online licensing for the entire country.
* Growing pains of the 10-year-old organization are subsiding, allowing for growth and new programs.
* The NIPR plans to launch a nationwide address change component within the year.
The National Insurance Producer Registry offers two main products: the Producer Database and the NIPR Gateway.
The Producer Database provides information relating to insurance agents and brokers (producers) and links participating state regulatory licensing systems into one common repository of producer information, or "one-stop shopping."
The PDB includes data from the Regulatory Information Retrieval System to provide a more comprehensive producer profile. Key benefits of PDB are:
* Financial/time savings;
* Reduction in paperwork;
* Real-time information;
* Verification of license and status in all participating states;
* Easy access via the internet; and
* Access to a single data source vs. multiple Web sites.
The NIPR Gateway links state insurance regulators with the entities they regulate to facilitate the electronic exchange of producer information. Data standards have been developed for the exchange of license application, license renewal, and appointment and termination information. All data flowing over the NIPR Gateway will conform to these standards. The key benefits of NIPR Gateway are:
* Reduction in paperwork and data entry;
* Development of national standards regarding electronic transmission of licensing data; and
* Faster turnaround time.
Coming Up: Producer Demographic Changes
NIPR is working on an address change component that would allow producers to quickly and easily view their demographic data in all licensed states and make changes. The component is due online in mid- to late-2006. Producers could make individual changes or change all states for one type (business, mailing, residence). Some changes may require follow-up by states, which would apply their own database rules. Regulators would receive a hard copy and/or electronic file of changes.
Source: NIPR Web site: www.licenseregistry.com
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|Title Annotation:||Agent/Broker; National Insurance Producer Registry|
|Comment:||Going for 50: nationwide online producer licensing is just a few states away.(Agent/Broker)(National Insurance Producer Registry)|
|Author:||Cavanaugh, Bonnie Brewer|
|Date:||Jan 1, 2006|
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