NAFA State Annuity Alert

As part of your NAFA membership benefits we actively monitor activity at the state and federal level--both legislative and executive/agency regulatory activity--that may affect fixed annuities and our industry.  Attached are two news releases from the California Department of Insurance:  The first announces the Insurance Commissioner's intent to conduct a comprehensive review of Nationwide/Allied Group of Insurance Companies' cyber security measures.  While this California activity is specific to a particular segment of the insurance industry, it may portend more wide-reaching efforts in the future and is, in any case, of interest to our industry as a whole.  The second release relates to changes in the licensing application process for all California-licensed insurance producers, including those seeking a life license.







SACRAMENTO - Insurance Commissioner Dave Jones announced today that his office will conduct a review of Nationwide/Allied Group of insurance companies' cyber security measures to ensure the company is doing all it can to protect consumers from theft or loss of their personal information.


Nationwide notified the department (CDI) earlier this month that a database was recently compromised resulting in the theft of confidential information for one million policyholders and non-policyholders, including names, social security numbers, and other identifying information. No credit card information was breached. Approximately 5,050 Californians were impacted.


"In a global economy, driven by electronic commerce, it is essential that all necessary steps are taken to ensure consumers are protected from an unintentional release or criminal theft of their personal data," said Commissioner Jones. "While Nationwide has briefed my department and agreed to update us with the findings of its internal investigation, I've instructed staff to conduct a follow-up review of the breach to ensure the company has taken the necessary steps to guard against a future system failure."


At this point, CDI is satisfied the company is taking appropriate first steps to notify consumers whose information was accessed and providing assistance, including offering credit monitoring and identity theft protection for those impacted with $1 million in free identity theft insurance coverage with no deductible.


Consumers who believe they may have been impacted by the security breach should call 800-760-1125, the toll-free number Nationwide has established to assist individuals or visit Consumers may also contact CDI at 800-927-HELP, if they need further assistance.


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Media Note: The Nationwide affiliates affected in California by the breach include: Nationwide Mutual Insurance Company, Nationwide Insurance Company of America, Allied Property & Casualty Insurance Company, AMCO Insurance Company, Depositors Insurance Company, & Titan Indemnity Company.



Customer Service Enhancements and Operational Efficiencies Continue for Insurance Agents, Brokers, Adjusters and Bail Agents

SACRAMENTO - The California Department of Insurance (CDI) today announced a new process for professionals submitting insurance agent, broker, adjuster and bail agent license applications to CDI. The new process enhances customer service and increases the operational efficiency of handling licensing applications statewide.

"Anytime the department can streamline a process and save applicants money, it's a welcomed improvement," said Commissioner Jones. "This important change also saves valuable staff time in handling the license application process by eliminating a large number of pending applications."

This improved process requires individuals to pass the qualifying license examination before they submit the required application. As a result, individuals pay the license application fee only if they pass the examination, which for most licenses is $128. In addition to these savings, the new process streamlines the handling of license applications and results in increased efficiencies for the staff that handle them for the department. This eliminates applications that were in a pending status while the applicant underwent the examination.

The change applies to California residents who apply for any insurance agent or broker license in which an examination is required (i.e., life, accident and health, property, casualty, personal lines, limited lines automobile and life limited to funeral and burial expenses). In addition, the change applies to all insurance adjuster and bail agent applicants.

In the past, individuals applying for these licenses were required to first submit a license application and include the license fee. They were then required to schedule their qualifying examination and submit a separate $37 fee. As a result, some individuals who did not pass the examination were required to pay a license application fee for a license they were never eligible to obtain because they failed to pass the exam.

Additionally, because the department is required by law to retain license applications for one year, the department was tracking hundreds of pending license applications needlessly.

This recent streamlining is the latest in CDI's ongoing efforts to improve service delivery and customer satisfaction in its licensing process. In early 2011, the department launched new options for license applicants to schedule and take examinations. Specifically, applicants can schedule their examinations either online or on the telephone as well as take their examinations at any one of 18 sites located statewide. Previously, there were only four sites. All of these examination sites include an onsite livescan fingerprint technician and most offer Saturday and evening appointments. The additional sites located throughout the state save applicants time and travel expenses.

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