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NAMIC Takes Issue with NAIC Fingerprint Model Act

INDIANAPOLIS (Jan. 10, 2006)—The National Association of Mutual Insurance Companies (NAIC) has told the National Association of Insurance Commissioners (NAIC) that it is opposed to the regulators’ proposed fingerprint model law because of the model’s conflict with existing company licensing provisions and concerns for confidentiality.

In written comments submitted Friday, NAMIC Regulatory Counsel Marsha Harrison said that during development of the NAIC Uniform Certificate of Authority Application (UCAA), inclusion of mandatory fingerprinting as part of company licensing procedures was already discussed and rejected in favor of a biographical affidavit containing more data and a verification process.

“While no changes have been made to the UCAA to include a fingerprinting requirement, the model law now under consideration certainly seems to favor, and suggest that states consider, adopting the officer and director fingerprinting as a new requirement,” Harrison wrote.

Such a step “would seem to be an indirect way of doing what has not been done with respect to the UCAA–addition of a new licensing requirement–and…indicate a disconnect between the Producer Licensing Working Group and its parent (D) Committee, on one side, and the National Treatment & Coordination (EX) Working Group, the NAIC group responsible for the UCAA and for the company licensing model currently being developed, on the other side.”

Harrison’s letter suggested that fingerprinting of officers and directors should more appropriately be considered by the National Treatment Working Group as part of ongoing deliberations there. While that group did review a version of the model at the request of the Producer Licensing Working Group, Harrison asserted that the issue of conflicting provisions had not been fully considered.

She said that NAMIC favors either: (1) omission of officers and directors from the current draft model act, or (2) inclusion in the model act of a drafting note expressly providing that the intent of the model is not to impose a new company licensing requirement in states where fingerprinting is not currently required for those individuals.

“The drafting note should clearly state that the portions of the model relating to officer and director fingerprinting are applicable only in those states where such a requirement currently exists,” wrote Harrison.

Her letter also expressed reservations about the regulators’ plan to locate the electronic fingerprint repository at the NAIC.

“Our primary reasons for believing that the National Insurance Producer Registry (NIPR) would be the better location for the repository are that: (1) NIPR, while an NAIC affiliate, is also a successful partnership of regulators and industry; (2) NIPR has proven itself capable of providing efficient, cost-effective and secure services; and (3) NIPR is subject to applicable state and federal laws related to privacy, data security and other data safeguards. NAMIC believes that NIPR is the superior locus for the fingerprint repository; no compelling reason for the change in location, however that change occurred, has been presented.”

For further information, contact
Rick Nelson, APR
(317) 875-5250 Tel
(317) 879-8408 Fax

Posted: Tuesday, January 10, 2006 12:00:00 AM. Modified: Tuesday, January 10, 2006 12:57:41 PM.

317.875.5250 - Indianapolis  |  202.628.1558 - Washington, D.C.

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