The model will help weed out “bad apples” by giving state regulators access to FBI criminal history, said Michael Gerber, vice president and general counsel with the National Association of Insurance and Financial Advisors, Falls Church, Va.

It will also streamline the fingerprinting process for producers with “a printed once, then done approach,” he added. The model will encourage uniformity, Mr. Gerber continued.

And, Mr. Gerber said, it calls for sufficient confidentiality protections to be established with a new NAIC central depository that is being anticipated as part of the model.

The model draft requires states to have a memorandum of understanding ensuring confidentiality with any entity they share information with.

It also states that “fingerprints and necessary identification information sent by a state commissioner to the NAIC shall not be subject to a subpoena, other than one issued in a criminal action or investigation, and shall be confidential, and not used in a civil action.

NAIFA said another benefit is that it encourages states to obtain electronic fingerprints for new resident producers which would allow them to obtain FBI criminal history information.

NAIFA added that in order not to slow down the model's advancement because of concerns over whether officers and directors should be part of this process, it would “not object” to a model limited in application to producers while separating out the officers and directors issue for further study.

The American Council of Life Insurers, Washington, in filed comments, offered 10 reasons why any central depository should fall under the purview of the National Insurance Producer Registry rather than the NAIC. The National Association of Mutual Insurance Companies also voiced concern over NAIC control.

ACLI in filed comments said NIPR control was agreed to in 2002; NIPR complies with the Fair Credit Reporting Act and state laws; fingerprint and repository costs will be kept low; and fingerprint collection, storage and transmission are “not necessarily regulatory functions.”

Michael Lovendusky, ACLI associate, said the Council would have comfort with the criminal history record check of officers and directors if the central depository resides with the NIPR and not the NAIC. It is “unclear” whether the confidentiality provisions for the central depository discussed in the model will be enforceable, he added.

In comments made in an interview with National Underwriter last month, Andrew Beal, NAIC general counsel, explained that a decision by the NAIC was made months ago to keep the fingerprint repository under the auspices of the NAIC because of the confidential nature of the information being collected. It was decided that to ensure that confidentiality, this information needed to be under NAIC authority, he said.

Don Cleasby, vice president, regional manager and counsel with the Property Casualty Insurers Association of America, Des Plaines, Ill., said PCI continues to express concern over the authorization of states to fingerprint officers and directors when such fingerprinting was not required under the NAIC's certificate of authority and applications embodied in the ALERT program.

By authorizing states to conduct such fingerprinting, Mr. Cleasby said there is a concern that it will become a requirement among states.

The second issue, he continued, is who controls the repository. While PCI wants it to be a one-step, one-stop process,” it would be better for regulators and insurers to have input through the NIPR, he added.

Wes Bissett, a senior vice president with the Independent Insurance Agents and Brokers of America, Alexandria, Va., said his organization opposes the model because it would add “extensive burdens and costs to the licensing process.”

With the opposition of agents, it is hard to imagine this model getting adopted in states, he said.

The “burden” would fall on producers, while officers and directors would not be subject to the same treatment, he said. Life agents who register with the National Association of Securities Dealers, Washington, would not be subject to the same state background check which he said is more strenuous than the NASD requirement.

Over the last three years the fingerprint model has been under discussion, states have not been “clamoring” for it, and efforts have been lost to “adopt real reforms,” Mr. Bissett said.

NAMIC, in Indianapolis, commented in a statement that it is opposed to the regulators' proposed fingerprint model law because of the model's conflict with existing company licensing provisions and concerns for confidentiality.

NAMIC Regulatory Counsel Marsha Harrison wrote the NAIC that NAMIC favors either omission of officers and directors from the current draft model act, or inclusion of a drafting note stating the intent of the model is not to impose a new company licensing requirement in states where fingerprinting is not currently required for those individuals.