Who Exactly is the NIPR and What Do They Really Do?
Many people confuse the NIPR with the PDB. They think the terms are interchangeable. In fact, though, one is the organization and the other is a database of producer information.
The NIPR or National Insurance Producer Registry was incorporated in October, 1996 as a nonprofit affiliate of the National Association of Insurance Commissioners (NAIC). One of the main purposes in creating the NIPR was to provide a central repository where jurisdictions (states and territories) would report producer (individual and business entities) demographics, licensing, appointments, and RIRS (Regulatory Information Retrieval System) actions in a single database. Before that, a person had to go to each state’s website to search for the producer’s licensing and appointing data and apply for licensure by paper. Thanks to the NIPR, the licensing arena has come a long way. No more paper, no more mailing forms to the states and waiting weeks and sometimes months to receive a license or appointment.
From the creation of the NIPR came the need for a producer number that was unique, no matter the jurisdiction, thus the National Producer Number or NPN was developed. Until that time each producer had a different license number for each state licensed. Some states tried to use the social security number of the individual producer, but that created security issues. The NPN is the single, most unique identifier a producer—individual or business entity—will maintain, assigned by the NIPR. It will never be reused, no matter the length of time it has been inactive. Some states have chosen to use the NPN as their state-specific license number.
The database itself is called the Producer Database, more commonly known as the PDB. One can generate a report, called the PDB Report, to collect all states’ information by producer. This prevents the licensing administrator from having to go to each state’s or territory’s website to search for the individual or business entity. Obtaining a PDB report has minimal cost, but you will get all the information about the producer. This holds true for business entities as well. If you go to a state website and look up a producer, you will only see that state’s information. If the producer has a revoked license or an RIRS action in another state, you would never know. The PDB Report gives you the entire record for that producer. In addition, it is more cost effective in the long run, especially if the producer is licensed in many states.
Gathering data from the states to report to the PDB is just one aspect of what the NIPR does. You may have heard the term “Gateway.” That is when the transactions, such as appointments, termination of appointments, licensing, renewal of a license, moves data electronically between the state and NIPR. The NIPR collects the data (name, NPN, license type, etc.) on behalf of the state’s business rules with the type of transaction, and then electronically sends it to the state. If the transaction does not meet the business rules (data) required by that state, the NIPR can reject the transaction (similar to a check and balance) before it is even sent to the state. This would avoid the state being charged a fee, or the transaction will be sent to the state for the state to determine whether to approve or reject. A rejection could occur, for example, if all of the required data is submitted but the producer no longer has an active license; thus, the state would reject the request to appoint. NIPR does not do a license check before sending the transaction. The insurer is responsible for verifying licensure by either checking the state website or PDB BEFORE sending the transaction. The NIPR is the mover of data, not the verifier of data, when it comes to sending a transaction.
The key to understanding the services the NIPR provides strictly depends on the business rules the state provides them: the data the state has to review to approve or reject a transaction. NIPR is the repository for the states’ business rules. They are not the decision makers nor are they the regulatory body. The responsibility of the states and territories is to submit requirements, changes, and updates to the NIPR so they can implement. NIPR is only as good as the business rules provided by the jurisdictions.
According to the NIPR website, the 2016 annual report was released in April, 2017. http://www.nipr.com/news/170407_nipr_releases_2016_annual_report.htm
The Executive of the NIPR, Karen Stakem Hornig made this statement:
“2016 not only marked a milestone anniversary for NIPR but we also processed a record-breaking 27.5 million transactions, representing a 9.57 percent increase over 2015. For two decades, NIPR has served as the trusted centralized resource for producers and we’re dedicated to constantly improving the quality of service and technology we deliver.”
The President of the NIPR Board of Directors, Roger Sevigny, who is also the Commissioner of New Hampshire said,
“Today NIPR is at the heart of the nation’s producer licensing system, providing one-stop shopping for all aspects of electronic producer licensing. Underlining everything we do is our commitment to delivering an outstanding experience for our customers and stakeholders.”
States and territories make changes to their statutes and regulations as necessary. It could be as simple as a fee change or as complicated as a new statute enacted by the state legislature.
The NIPR sends email notifications to let users know when changes or updates are going to occur. Some days, they send several notifications about multiple states. If you are an insurer and you have your own processing system, you have to implement these state changes, in many cases, within a short window of time. It is a full-time job just trying to keep up. Recently a major change occurred in New Mexico. They changed their back-office system to SBS (State Based Systems). They also changed license numbers and lines of authority. It took several months to implement and test, before moving to production. Without these changes, transactions would not move through the Gateway, producing no licenses and appointments.
When you choose the VUE Software Compliance system, you will no longer have to worry about these changes. Your assigned Implementation Manager and Team will work with you and on your behalf to make these adjustments. They will also test in a NIPR beta environment before implementing. VUE has a team of technical and subject-matter experts who work closely with NIPR IT staff to ensure updates and changes are made to exact specifications and timelines. Your system will always remain in compliance with all jurisdictions and NIPR.
VUE Software customers no longer need to worry that one day their system will be out of synch with the NIPR Gateway.
VUE works tirelessly to keep your system compliant to avoid market misconducts, fines, and sanctions.
VUE is YOUR solution to meet all your licensing and appointment needs.