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How to make the licensing process easier: regulations can make your job difficult--take advantage of tools to make it easier.

It has been a particularly challenging year for those in the insurance business. Not only has the recession made it more difficult for businesses and consumers alike to plan and protect themselves, but the insurance industry is being monitored closely in the aftermath of government bailouts for the financial services industry.

With both reputation and customer security at stake, you and your practice must be buttoned up when it comes to meeting regulatory and licensing requirements. Staying vigilant on internal matters will ultimately affect the quality of service and protection that you can provide for your clients, who are relying on their insurance policies to keep themselves and their families safe in a challenging era.


The insurance industry is regulated primarily at the state level. Federal regulators oversee holding companies, consolidated groups of banks, and securities firms. However, state regulators are responsible for overseeing insurers, insurance agents, and agencies--the insurance policymakers within their jurisdictions.

Depending on the state, the regulator is appointed or elected. State insurance regulators monitor the insurance market and financial activity within their jurisdictions. Organized through the National Association of Insurance Commissioners (NAIC), a nonprofit organization, state regulators work together to monitor multistate insurers and agencies. To provide the best protection for consumers in their jurisdictions, state regulators require a number of materials and data from insurance companies, ranging from financial data to licensing information to reports of fraud.

As an affiliate of the NAIC, the National Insurance Producer Registry (NIPR) works with agents, companies, and regulators to facilitate the exchange of licensing and reporting information. With this information, regulators are able to keep an accurate pulse on producers in their states, in addition to protecting consumers.

Being attentive to requirements makes it easier for regulators to recognize, report, and address fraud, reducing the amount of potential damage caused to the public by fraudulent agents or agencies.

This also benefits you and your practice by affecting the bottom line. Keeping insurance businesses healthy and up-to-date on matters such as licensing ensures that clients are properly protected--and at a time when the insurance industry has been criticized for a number of wrongdoings, maintaining and building a customer base with confidence is important for all insurance practices.


The first step you must take to better handle licensing and regulatory needs is to become well-informed on any and all responsibilities at the individual level.

For starters, all producers are required to hold current licenses in each state in which they do business. It is also important to know that a client can check your licensing and request background information from the state departments of insurance to ensure that they're working with properly licensed producers.

In addition, producers must:

* Have a current active individual or business entity license and appointment, if required, for the type of insurance being solicited

* Complete the approved prelicensing and continuing education requirements for each jurisdiction and license type

* Comply with ongoing regulatory requirements, including the renewals/continuation process

* Comply with regulatory disclosure and reporting practices, including the requirement to report an administrative, civil, or criminal action to the jurisdictions in which the producer holds an active license(s)

* Submit required fees

Opportunities for cutting costs and staying profitable are top business priorities in a struggling economy and you should be mindful of this when choosing tools for handling regulatory and licensing work. It is possible to handle a volume of licensing and regulatory work both efficiently and cost-effectively.

Several companies and organizations offer tools to help producers manage important correspondence and data exchange. Tools with electronic capabilities or ones that offer a central repository of information will offer more benefits, as electronic exchanges can reduce paperwork and mailing costs, as well as making the licensing process easier, especially for multi-state companies or businesses with a large number of agents. With insurance companies producing a large amount of paper each day the ability to cut back wherever possible is also good for the environment and for helping reduce company waste.


The licensing process is often complicated and time-consuming, and as the saying goes, "The devil is in the details." It's easy for insurance agents to make mistakes or become derailed in the application process, so it's important to double-check forms, leave enough time for pending applications to be reviewed, and attach the correct supplemental information.

One common mistake agents make is filing incomplete applications or filing with incorrect or missing fees. Filing electronically can guide you through the process, helping you avoid mistakes or omissions by requiring you to complete mandatory application fields and pay fees up front, making the process a much more efficient use of your time and effort.

Not all issues can be solved by electronic filing, however Some producers inadvertently answer "yes" to uniform application background questions when the answer should be "no." Sometimes, they even apply for the wrong type of license, ultimately renewing licenses they do not want to renew. The best way to avoid these problems is to research state requirements and, if necessary, work with your state insurance department to determine the correct license before sending in the application.

It is also important not to overlook necessary attachments or mismanage the time it takes to file this information. For example, "yes" responses to the background questions on the uniform application are held for state approval. Often, agents forget to send documents that support the original applications, delaying the process. The ability to electronically file and attach these documents allows agents to send in all required information simultaneously, which can prevent you from scrambling to send in paperwork at the last minute or from not knowing what you are supposed to include. Sending attachments electronically can also expedite the review process so that the application is processed more quickly than it would have been with non-electronic attachment systems.

Finally, while there is only one uniform application, some states have special requirements. It is your responsibility to work with your state regulator to stay informed on the information you must provide in order to remain compliant.

By choosing technologically advanced licensing tools and making use of regulation resources, the licensing process can be easier and less expensive, ultimately saving you valuable time and money that can be focused on customer service and building a successful business.


The National Insurance Producer Registry (NIPR), incorporated in October 1996, is a nonprofit affiliate of the National Association of Insurance Commissioners (NAIC), which is the voluntary organization of insurance regulators from the 50 states; Washington, D.C.; and five U.S. territories. Currently run by executive director Maryellen Waggoner NIPR aims to become the premier public-private partnership supporting the work of the states and the NAIC in re-engineering, streamlining, and standardizing the insurance producer licensing process for the benefit of regulators, the insurance industry, and consumers.

The NIPR created the Gateway tool for insurance regulators. This communication network links state regulators with the entities they regulate in order to facilitate the electronic exchange of producer information. Data standards have been developed for the exchange of information relating to license applications, license renewals, appointments, and terminations, and all data in the NIPR Gateway conforms to these standards.

For insurance producers, NIPR's Producer Database (PDB) serves as an electronic database containing information relating to individual insurance agents. The PDB links participating state regulatory licensing systems to one common repository of producer information. Instead of having to work through multiple state Web sites, insurers can access a central repository of licensing information submitted by all 50 states, D.C., and Puerto Rico--which reduces paperwork and saves time for businesses.

* For more information, visit www.niprcom.

Maryellen Waggoner is the executive director of the National Insurance Producer Registry. She can be reached at 816-783-8769.
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Title Annotation:YOUR PRACTICE
Author:Waggoner, Maryellen
Publication:Agent's Sales Journal
Date:Jan 1, 2010
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