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NAIC Producer Licensing Working Group Hears Report on Flood Agent Training

During the NAIC's Spring National Meeting in Orlando, the Producer Licensing Working received an update from Ed Conner on the Flood Insurance Reform Act of...
March 14, 2006

During the NAIC's Spring National Meeting in Orlando, the Producer Licensing Working received an update from Ed Conner on the Flood Insurance Reform Act of 2004, which mandates the Federal Emergency Management Agency (FEMA), in cooperation with state insurance regulators, establish minimum training and education requirements for all insurance agents who sell flood insurance.

As part of this effort, FEMA reported it has established an on-line training course, which producers can complete and obtain a certificate of completion. The working group recognized this is a Federal mandate and the need to coordinate the implementation of these training and education requirements with FEMA.

Conner reported that the legislation does not specify the frequency of the training. Even though most states ask questions on the licensing exam on flood insurance, Conner said that this does not satisfy the requirements. He reiterated that the Federal government requirements are for post-licensing continuing education training for agents who sell flood insurance. Conner pointed out that PIA did raise the concern that if this requirement were implemented, then it may result in less agents writing flood insurance. Hopefully, if the requirements could be incorporated into already existing standards and not in addition, then this concern could be minimized.  The committee considered adopting the NCOIL language. 

In other action, this working group discussed the states' use of appointment termination codes and whether all of these codes are necessary. The working group agreed to review these codes in more detail and make a final recommendation on the retention and deletion of these codes during its interim meeting in May.  Some "for cause" terminations may be for lack of production, so if this code is used then the state may have to have a verification system because this information is public.  There may be cases where a company believes something is for cause, but a regulator may not.  One possible solution may be to allow a company to submit something as for cause, but the regulator would not display it publicly until they agree with the for cause label.