NAIC Moves Closer to Streamlining Business Entity Licensing
The NAIC Producer Licensing Task Force, chaired by Roger Sevigny (NH), deliberated several new business entity licensing standards. The members of the task force had trouble agreeing to all the proposed standards and looked as if they were at an impasse when commissioner Sharon Clark (KY) made a motion to move forward on several standards that most task force members could agree on.
The task force recommends that states not require the licensing, registration, or appointment of individual branch locations, or require a designated responsible producer to be onsite at a branch location at all times. Further, states that require the reporting of affiliations must do so utilizing an electronic process. The new standards stipulate that nonresident states should not require business entities to submit organizational documents, filings related to officers and directors, proof of financial responsibility, or similar documents. Finally, the new standards say that nonresident states should not require a business entity to register as a foreign corporation as a condition of obtaining or maintaining a nonresident insurance license.
What It Means to Agents: These recommendations will help producers navigate the complex process for registering business entities. We will continue to advocate for further reforms, including not requiring business entities to be licensed by line of authority. We would like to commend Commissioner Clark, as well as Anne Marie Narcini, from New Jersey, who chairs the Producer Licensing Working Group, for their hard work and dedication to this issue. Their efforts were really instrumental in helping us move forward.