CCIA - CONSUMER CREDIT INDUSTRY ASSOCIATION - LETTER TO NAIC

CONSUMER CREDIT INDUSTRY ASSOCIATION 542 South Dearborn Street -Suite 400 Chicago, Illinois 60605 Telephone (312) 939-2242 FAX (312) 939-8287 eldie07@bellsouth.net LARRY DIEHL VICE PRESIDENT GOVERNMENT RELATIONS July 2, 2009 Anne Marie Narcini, Chair NAIC Producer Licensing Working Group Department of Banking and Insurance 20 West State Street P.O. Box 325 Trenton, New Jersey 08625-0325 Dear Anne Marie, The Consumer Credit Industry Association commends the NAIC for seeking consistency in licensing procedures for limited lines as well as for business entity licenses. Member companies currently utilize business entity licenses to sell the core limited lines credit products, this distribution method being beneficial to consumers, regulators and industry. CCIA therefore strongly supports preservation of business entity licenses especially in application to limited lines. CCIA produced recommendations for a uniform approach to business entity licenses working in tandem with limited lines licenses. These Uniformity Recommendations were shared with the working group earlier this year. A copy of these Recommendations is included with this letter along with a State by State outline examining the current implementation of these principles by states on the Working Group. The Working Group survey of states’ licensing approaches for limited lines coverages is not yet complete. CCIA member companies also conducted a review of business entity licensing for credit insurance in the states that are represented on the Working Group and have included a copy for your use (SEE State by State Outline). Additionally CCIA did a review of states which follow the uniformity principles that CCIA advocates (SEE Limited Lines Business Entity Licensing for Credit Insurance – Approaches Currently Available) This research, from an industry standpoint of those getting licenses in these states, is offered to assist the Working Group in its deliberations. It is understood that changes needed for producer licensing uniformity need to be managed without seeking new amendments to the Producer Licensing Model Act (PLMA). CCIA’s review notes the states that have adopted the PLMA or use a state-specific version of it. State interpretations of the procedures required by PLMA are an inherent part of the problem for uniformity but, conversely, are easier to correct than statutory amendments to the Act. As with most limited lines products, the offering of credit insurance is secondary to the primary consumer transaction, i.e. the taking out of a loan. The principle purpose of the transaction A TRADE ASSOCIATION OF COMPANIES PROVIDING PRODUCTS AND SERVICES IN CONNECTION WITH CONSUMER CREDIT TRANSACTIONS CONSUMER CREDIT INDUSTRY ASSOCIATION 542 South Dearborn Street -Suite 400 Chicago, Illinois 60605 Telephone (312) 939-2242 FAX (312) 939-8287 eldie07@bellsouth.net LARRY DIEHL VICE PRESIDENT GOVERNMENT RELATIONS between the individual offering the coverage and the consumer is other than the sale of insurance. This specialized manner of offering insurance is the basis for the limited lines licensing concept. The CCIA recommendations do not address the inconsistencies among the states regarding recognition of different products as limited lines. All states except Illinois currently recognize credit insurance as a core limited line. Rather, the focus with our effort was on the licensing necessary for efficient product sales compliant with state requirements. The Uniformity Recommendations build on the use of limited lines licenses with a uniform approach to business entity licensing. The business can be licensed and appointed, with a responsible individual identified and licensed who is responsible for state regulatory compliance, as well as responsive to any consumer issues that arise. CCIA’s recommendations mirror the licensing systems in place in a majority of the states. The Working Group is urged to consider this work as a foundation for efforts to finalize standard guidelines for national licensing consistency. CCIA is always available as a resource in considering credit insurance rules, practice and procedure. For any additional information, please call me at (305) 247-3244 or by contact me by email at eldie07@bellsouth.net Yours truly, Larry Diehl, Esq. Vice President, CCIA cc: Linda Hall, Chair, NAIC Producer Licensing Task Force Bill Burfeind, Ex. VP, CCIA Rebecca Smart, CCIA Chair Reed Gass, CCIA President Greg Welker, NAIC staff Linda Brunette, PLWG Vice Chair A TRADE ASSOCIATION OF COMPANIES PROVIDING PRODUCTS AND SERVICES IN CONNECTION WITH CONSUMER CREDIT TRANSACTIONS CONSUMER CREDIT INDUSTRY ASSOCIATION 542 South Dearborn Street -Suite 400 Chicago, Illinois 60605 Telephone (312) 939-2242 FAX (312) 939-8287 eldie07@bellsouth.net LARRY DIEHL VICE PRESIDENT GOVERNMENT RELATIONS A TRADE ASSOCIATION OF COMPANIES PROVIDING PRODUCTS AND SERVICES IN CONNECTION WITH CONSUMER CREDIT TRANSACTIONS CONSUMER CREDIT INDUSTRY ASSOCIATION 542 South Dearborn Street -Suite 400 Chicago, Illinois 60605 Telephone (312) 939-2242 FAX (312) 939-8287 eldie07@bellsouth.net LARRY DIEHL VICE PRESIDENT GOVERNMENT RELATIONS A TRADE ASSOCIATION OF COMPANIES PROVIDING PRODUCTS AND SERVICES IN CONNECTION WITH CONSUMER CREDIT TRANSACTIONS