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NIPR's Producer Database to Serve as Licensing Tool for All Surplus Lines Insurance Business

Source: NIPR

Posted on 08 Dec 2010

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The National Insurance Producer Registry (NIPR) has announced that its online licensing products, the Producer Database (PDB) and the Gateway, will serve the surplus lines industry in meeting new licensing and renewal regulatory requirements, furthering NIPR's mission to enhance efficiencies as a licensing resource.

Provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act signed into law earlier this year are an effort to create more uniform surplus lines licensing and regulatory processes. The 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 (or non-admitted insurance) provide coverage for unusual risks typically unavailable in the traditional insurance marketplace. When a consumer or business entity with higher risk and liability needs coverage that cannot be offered by a licensed insurance producer through an admitted insurer, the risk is typically placed by a licensed surplus lines producer with a non-admitted authorized surplus lines company. As regulations vary from state to state, producers may have to seek permission and licensure to operate in a non-admitted market before insuring the 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. With a paperless option, surplus lines producers no longer have to physically present the regulatory state with paperwork, and the state will no longer have to continually review this paperwork. Everything will be 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."