Takeaways:
- NAIC debated its obligation as an association, but not a regulator itself
- The tool's biggest advocate said the prototype is not ready
- Registry lookup tools are now only available to industry and regulators
The national state insurance regulators' association sent its plans for agent verification technology back to the drawing board, even as an advocate of the plans stresses their necessity.
In a meeting of the NAIC's Market Regulation and Consumer Affairs Committee on August 13, Trinidad Navarro, insurance commissioner of Delaware, said, "I'm appreciative of the product that was produced. It falls well short of what we were hoping for."
The technology would make it possible for consumers to look up agents' regulatory filings and records, and learn of any disciplinary actions.
"We want to help consumers find suitable producers. We owe it to them to share information that the NAIC already has," Navarro said. "These include sharing national data on serious disciplinary actions anywhere in the country. Why wouldn't we do that? Not to share such information with consumers is not responsible when producers have engaged in egregious activity."
In April, the committee heard presentations from the Financial Industry Regulatory Authority (FINRA) about its tool for checking financial brokers' credentials, along with a NAIC staff presentation of a prototype and an overview of Attachment Warehouse, a platform from the National Insurance Producer Registry (NIPR), a unit of NAIC.
Currently, state regulators may have no idea if an individual insurance agent has regulatory actions against them in other states, observed Larry Deiter, director of the insurance division of the South Dakota Department of Labor and Regulation. NAIC is not a regulator, however, and should not take on the functions of a regulator like FINRA, Deiter added.
As an example, Navarro mentioned that an individual convicted of insurance fraud had been able to get a license in another state, which regulators caught. "What we want consumers to be able to do -- we learned of it and we shared it as regulators, but we want consumers to be able to find that themselves," he said. "Some argue that maybe not a lot of folks would use this. We do know that the agent check or broker check from FINRA is viewed thousands of times. People who are buying products like this deserve the ability to research that information just like we can as regulators."
