Sullivan Backs Multi-State Licensing Of Agents, Brokers

A proposed federal law to centralize licensing for insurance agents and brokers has the backing of not only the industry, but also Connecticut Insurance Commissioner Thomas Sullivan, who has been skeptical of most other moves toward federal regulation.

The bill would establish a nonprofit corporation to handle licensing, continuing education and other agent qualification requirements on a multi-state basis.

The Independent Insurance Agents of Connecticut, The Hartford Financial Services Group and Travelers Co. all expressed support for the plan.

“Having 50 different licensing standards is cumbersome,” said Warren Ruppar, president of the agents’ group. “We have been involved in trying to bring about reciprocity in agent licensing so that business can be transacted easier between Connecticut and other states.”

Ruppar called the proposed bill a “win-win” situation for everyone involved. State regulators would get to keep their authority over the industry, states would maintain cash flow from licensing fees, and agents and brokers would be able to conduct business more efficiently over state lines.

Sullivan generally agreed. “This is one of the very few areas where I see the need for federal legislation,” he said.

Streamlining the licensing process would make it easier for state regulators and agents and brokers to understand the qualifications that need to be met in order to conduct business across state lines, Sullivan said.

The proposed law also would give state insurance commissioners a say in determining the licensing standards, which would include a mandatory criminal background check for all agents and brokers.

Both The Hartford and Travelers view the bill as a way to create a more efficient licensing system for agents and brokers.

Sullivan has generally opposed federal regulation of insurance. He objected to a federal proposal in March that would have allowed insurers to choose between state and federal charters and regulation. And he expressed concern over the establishment of a federal insurance information office that would analyze insurance information, primarily focusing on international issues.

The optional federal charter issue was raised again late last month in the Senate Banking Committee, chaired by Sen. Chris Dodd. Dodd hasn’t taken a side on the issue, though he has said changes in the state regulatory system are overdue.