Poolman Backs Uniform Licensing, Contingent Commissions

North Dakota Insurance Commissioner Jim Poolman believes that creating a uniform producer licensing system is a top priority, not just for North Dakota, but for every state.

“We’ve worked hand in glove with our independent agents at home, because of course, both independent and non independent agents want a uniform system of licensing. The last thing agents anywhere want is to have the federal government take over the licensing of insurance agents. Agents want us to continue the progress in creating this uniform system,” Poolman says.

Poolman, who is serving his second term as insurance commissioner, sits sit on the National Association of Insurance Commissioners (NAIC) National Insurance Producer Registry (NIPR) and is chairman of the Producer Licensing Working Group.

“Our goal is to set uniform standards for producers to get licensed across state lines and then leverage the technology that we have through the NIPR to be able to license agents and then use the same technology to allow them to renew their licenses as well,” Poolman said. “We also want the technology to work for the states that track appointments. All of these parts of the program are incredibly important for agents, but also incredibly important for companies to make sure that the system is seamless and efficient as possible.”

Poolman also believes that an efficient producer licensing system is just another step to avoiding federal oversight. He believes strongly in state regulation. He also supports the Interstate Compact as another way of modernizing and strengthening state regulation of insurance.

The North Dakota commissioner, who also spent eight years in the legislature, backs agents’ ability to receive contingent commissions. He believes the large company settlements targeted illegal bid-rigging—not contingent commissions.

“Everything that Elliot Spitzer found as the attorney general of New York was related to bid rigging and was already illegal. It wasn’t the contingent commission piece of the scenario that was illegal. It was the bid rigging. Of course, we would be opposed to bid rigging in our marketplace, but I think that normal contingent commissions in the average agent marketplace is not a bad thing and actually keeps jobs in our marketplace,” Poolman said.

He doesn’t believe that “disclosure” on commissions is a necessary step either.

“I don’t think it’s necessary for the agent to disclose that a certain percentage is going to pay his or her salary for bringing you in the door. We don’t ask the salesperson when they sell you a car what commission he or she will get from the sale price of that car. I don’t think it’s necessary to disclose every piece of compensation that an agent receives from selling a policy. You’re buying a product, and you’re paying a premium for that product. Built into that product is compensation, and consumers know that,” Poolman contends.

Poolman shared his views on producing licensing, contingent commissions, modernization of rates and more during an interview with Insurance Journal, one in the series with 15 state insurance regulators. Poolman’s video interview can be viewed in its entirety at www.insurancejournal.com/broadcasts.

Topics Agencies