Pennsylvania Won't Submit Agent Fingerprints

BY JIM CONNOLLY
National Underwriter News
Feb. 21, 2006
Posted March 7, 2006


Pennsylvania has stopped participating in the fingerprint repository project sponsored by the National Association of Insurance Commissioners, Kansas City, Mo., that has drawn heavy opposition from insurance agents.

Diane Koken, Pennsylvania's insurance commissioner, disclosed the state's action on Friday in a letter to the Insurance Agents and Brokers of Pennsylvania.

Her department will no longer submit digital fingerprints to the NAIC Digital Fingerprint Central Repository pilot project, she wrote, citing the "national and local debate surrounding the efficacy of this process."

Ms. Koken's letter also noted ongoing debate regarding the NAIC Criminal History Record model act coupled with pending Congressional action on NAIC access to the Criminal Justice Information Services Division of the FBI.

The letter stated that "until there is greater consensus surrounding this issue, we are not prepared to continue to submit fingerprints to a repository and have ended our submissions effective today."

The letter came following the introduction of a fingerprint bill backed by the IABP that was introduced by State Rep. Nicholas Miccozie, chairman of the Pennsylvania House Insurance Committee.

His bill would prohibit the department from transmitting producer fingerprint records to the NAIC pilot fingerprint repository.

The bill also prohibits the department from keeping fingerprint records in any other state or national database. It enjoys 32 co-sponsors, 15 of whom are members of the House Insurance Committee, according to IABP.

A central repository has been a cause of ongoing debate among regulators and industry. Currently, the repository project focuses on producers, but there has been discussion about extending it to officers and directors.

Issues raised during discussions on the matter have ranged from whether a depository should be the shared responsibility of regulators and industry representatives through the National Insurance Producer Registry to whether there should be a depository at all.

Wes Bissett, senior vice president with the Independent Insurance Agents and Brokers of America, Alexandria, Va., believes that a repository is not needed.

The reason, according to Mr. Bissett, is that the NAIC never made a case for such a repository. If regulators are trying to create uniformity, he argued, that can be achieved through reciprocity among states. Such reciprocity better advances the idea of uniformity and the efficiency of state regulation, he continued.

He said that the energy devoted to advancing a repository can be better used streamlining the producer licensing process. For instance, he continued, licensing requirements for agents writing outside of their domestic state can include licensing the individual, the agency and getting a license as a foreign corporation.

So, for instance, according to Mr. Bissett, if an agent's customer's daughter goes to college in a different state and needs auto insurance, that additional licensing may be required.

The IABP responded positively to the news. In a statement, John J. Collins, IABP chairman said: "We commend Commissioner Koken for taking this action. It demonstrates that she understands the importance of protecting producers' privacy rights. Not only is this a matter of protecting members' rights, but it is also a matter of guarding against a disturbing precedent."

Copyright © 2006 by The National Underwriter Company



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