Impasse Reached on Producer Licensing Model Exemption

The National Association of Mutual Insurance Companies has reached an impasse with the Independent Insurance Agents of America. The dispute centers over which agency and company employees should be exempted from licensure requirements under the new Producer Licensing Model Act to be proposed by the National Association of Insurance Commissioners.

In a letter sent to Iowa Insurance Division Commissioner Terri Vaughn, chair of the NAIC NARAB Working Group, NAMIC and the nine other signatories report they have been unable to resolve their differences with the IIAA over Section 4, subsection B (8) of the model. The model act exempts “employees of an insurer or of an insurance producer who respond to requests from existing policyholders on existing policies provided that those employees are not directly compensated based on the volume of premiums that may result from these services and provided those employees do not otherwise sell, solicit or negotiate insurance.”

The signatories believe that eliminating the word “otherwise” from the sentence would remove the exemption for service to existing policyholders on existing contracts.