State Regulators Stress Uniformity of Administrative and Licensing Systems

December 12, 2006

The National Association of Insurance Commissioners stressed its support for what it says is one of the strongest tools for state regulators, State Based Systems (SBS), during its recent meeting in San Antonio.

SBS serves as a back office processing system for producer licensing, company licensing, consumer services, enforcement, fraud, and revenue management. It includes correspondence and document tracking, as well as reporting and data-extract features.

“SBS, used in conjunction with other NAIC technical offerings, can significantly reduce a state’s financial and human resources by providing support for daily regulatory activities,” said Julie Fritz, director of the NAIC’s Insurance Products and Services Division. “As a result, this leaves the state insurance department with more resources to devote to other initiatives, which oftentimes get pushed to the back burner.”

“State Based Systems should be a key part of the NAIC’s overall membership strategy in the improvement of state-based insurance regulation,” said Walter Bell, NAIC president and Alabama insurance commissioner. “That is made possible by offering uniformity and integration, which are both so very important in the preservation of state regulation.”

The NAIC offers SBS to state insurance departments as a benefit of membership in an effort to simplify and enhance state insurance regulation processes.

The system also offers a variety of services that assist consumers in safely choosing insurance providers, and it provides insurance companies and producers with iaccess to information and real-time tools that make the application and approval processes more efficient.

“These services are online, self-help in nature and, for the current states that use SBS, have not only streamlined application and approval processes, but reduced the number of phone calls and letters received by the department — all of which can be extremely time consuming,” Bell said.

“The external ‘self-help’ services offered via SBS have further reduced our workload by reducing the number of phone calls and letters we have to answer and process,” said Roger Sevigny, NAIC secretary-treasurer and New Hampshire commissioner. “SBS has allowed our department to keep up with the growing demands placed on our staff. Ten years ago we had four people in our Producer Licensing Department, and they processed about 13,000 licenses. This year, still with four staff members, we are processing more than 45,000.”

“Member states have an ability to be influential in the future of SBS,” Sevigny said. “Through the SBS business model, via the Licensee Group, we exchange ideas continuously with other regulators, learning how to make our own processes function more efficiently. This has played into enhancing our effectiveness as consumer protectors.”

Source: NAIC

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