Online Database to License Surplus Lines Business Under Reform Efforts

December 7, 2010

One provision under new surplus lines insurance reform legislation was made easier to implement now that a national online producer database has expanded to meet the licensing needs of surplus lines brokers.

The National Insurance Producer Registry (NIPR) will now offer its online licensing products, the Producer Database (PDB) and the Gateway, to the surplus lines industry to meet new licensing and renewal regulatory requirements mandated under provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act signed into law earlier this year. NIPR is a non-profit affiliate of the National Association of Insurance Commissioners (NAIC). The organization developed and implemented the Producer Database (PDB) and Electronic Appointments/Terminations for the insurance industry.

The provisions under the act, also known as the Nonadmitted Reinsurance Reform Act (NRRA), will create more uniform surplus lines licensing and regulatory processes among states. One provision under the new law prohibits states from collecting surplus lines licensing fees unless surplus lines producers are participating in a national database for licensing and renewals.

“NIPR is proud to serve an important role with the only nationally available online producer database for the industry,” said Linda Hall, NIPR board president and director of the Alaska Division of Insurance. “These provisions are very important to creating a seamless licensing and renewal process in the marketplace.”

Surplus lines regulations vary from state to state and producers may have to seek permission and licensure to operate in a non-admitted insurance market before insuring a risk in a particular state. The digital capabilities provided by NIPR will give producers a paperless system that will improve the efficiency of meeting various state requirements, regulators says. Participated in the NIPR will eliminate necessary paperwork required by regulatory state, moving everything online.

“The surplus lines market has a more cumbersome licensing process, so there is a strong demand for improved speed-to-market options,” said Hall. “The digital system will get producers licensed faster and allow them to serve consumers more efficiently.”

By July 2012, all states are required to participate by submitting their surplus lines producer licensing information to the national producer database. NIPR is working with each jurisdiction to implement the electronic system for initial licensing and renewals. Each state has an implementation phase that involves developing, coding, testing and implementing the technology.

“This is an ongoing priority for NIPR to work with all remaining states to implement surplus lines licensing and renewals,” said Hall. “This step further supports NIPR’s vision of one-stop shopping.”

Source: NIPR, www.NIPR.com

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