NAIC seeks public comment on producer licensing handbook revisions

A National Association of Insurance Commissioners (NAIC) working group has adopted revisions to the association’s State Licensing Handbook for insurance producers and has requested public comment.

The Producer Licensing Uniformity (D) Working Group adopted the revisions on Oct. 7. The Producer Licensing (D) Task Force will review all submitted comments and consider adopting the revised handbook at its Nov. 5 meeting.

The revisions include several additions to the recommended best practices for insurance regulators on producer exam content and testing administration. These include establishing a state advisory committee made up of state insurance regulators and the industry to work with testing vendors annually to review examination form questions “for substantive and psychometric requirements.”

The working group recommends states should work with testing vendors to approve and issue candidate information bulletins that “accurately describe the examinations and examination policies and procedures, and provide sufficient examination content outline and study references for the candidate to prepare for the examination.”

It’s also recommended that states set clear performance standards for test vendors and require accountability.

The new recommendations include making testing available at locations reasonably convenient to residents of all areas of the state, with registration available online or by phone and the ability for a candidate to schedule testing within two to five business days of registration, according to the proposed revised handbook. It also recommends that states administer exams through a secure test-center network that employs qualified test proctors.

Another proposed addition to the handbook states that there isn’t a uniform approach nationwide on whether the surplus lines license (for residents and non-residents) is a separate license type or a line of authority on the producer license.

“Regardless of the approach taken, a resident must hold a valid property/casualty producer license to qualify for the issuance of a surplus lines license,” the proposed addition states. “This underlying P&C license requirement is for both individuals and business entities.”

Proposed requirements for remote testing guidelines are included in the revisions as well.

According to the revisions, remote testing offers the same support as in-person test sites but includes several guidelines for states to follow to ensure proper testing:

1. 1. “Procedures for conducting a system check of the candidate’s computer and internet service are sufficient.
   2. “The installation of any necessary software to facilitate the delivery of the exam.
   3. “Conduct a comprehensive security check, including verifying the identity of the candidate.
   4. “Candidates must be in a distraction-free environment, where they can complete the exam unassisted in a secure environment.
   5. “Exams are continuously monitored by video and audio recording similar to in-person test sites, as well as AI-enhanced monitoring proctoring.
   6. “Exam hours should include evening and weekend hours.
   7. “Testing vendors should establish procedures that analyze post- exam data for patterns of suspicious activity.”

The proposed changes also provide additional guidance on approval of continuing education instructors.

Comments on the revisions and additions to the handbook will be accepted through Oct. 30. Written comments should be sent to Tim Mullen, NAIC staff support for the Producer Licensing (D) Task Force, at [email protected].

At the Nov. 5 meeting, the task force will also consider adopting proposed revisions to the NAIC Independent Adjuster Licensing Guideline, the 1033 written consent process template, and proposed 2027 task force charges.

The agenda and materials for the meeting will be posted on the task force webpage.

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