NAIC Licensing Handbook Revisions Add Exam and Remote Testing Guidance

Proposed changes to the NAIC State Licensing Handbook would give states more detailed guidance on producer exams, remote testing and surplus lines qualifications. The practical focus is on making exam content and delivery more consistent, while leaving states flexibility in how they structure surplus lines licenses.

The Producer Licensing Uniformity (D) Working Group adopted the revisions on Oct. 7 and opened them for public comment. The Producer Licensing (D) Task Force is scheduled to review comments and consider adopting the revised handbook at its Nov. 5 meeting. Comments are due Oct. 30.

More oversight of producer exams

The proposed best practices call for states to work with testing vendors each year to review exam questions. A state advisory committee made up of insurance regulators and industry representatives would assess questions for substantive and psychometric requirements. That review could help states and vendors check whether exams measure the knowledge they are intended to test and meet applicable standards.

The handbook would also recommend that states work with vendors to approve candidate information bulletins. Those bulletins should explain exam content, policies and procedures, and give candidates enough detail on topic outlines and study references to prepare. Clearer guidance before registration can help candidates understand what an exam covers and what to expect on test day.

States would also be encouraged to set clear performance standards for testing vendors and hold them accountable for meeting those standards. That puts vendor performance alongside exam design as an area for ongoing oversight.

Access and scheduling are part of the proposed guidance, too. Testing should be available at locations reasonably convenient to residents throughout each state, with registration offered online or by phone. The revised handbook says candidates should be able to schedule an exam within two to five business days after registering. States are also encouraged to use a secure network of test centers staffed by qualified proctors.

Remote exams would have defined safeguards

The revisions propose a set of practices for remote testing, with the stated aim of providing support comparable to in-person testing. Before an exam, the system should check that a candidate’s computer and internet service can support the test, and any required software should be installed. Identity verification and a broader security check would also be part of the process.

Candidates should take exams in a secure, distraction-free setting and complete them without assistance. The proposed guidance calls for continuous monitoring through video and audio recording, alongside AI-enhanced proctoring. It also recommends evening and weekend exam hours, which could give candidates more scheduling options than weekday-only availability.

Testing vendors would be expected to review data after exams for patterns that may indicate suspicious activity. Taken together, the proposed steps address the full remote testing process: technical readiness, identity, the testing environment, monitoring and follow-up review. The handbook presents these as recommended practices for states to consider, rather than a single nationwide operating model.

Surplus lines licensing remains a state choice

The handbook addition recognizes that states do not follow one uniform approach to surplus lines licensing. Some treat surplus lines as a separate license type; others treat it as a line of authority attached to a producer license. The proposed text leaves that structural choice open.

It does set out an underlying qualification: a resident must hold a valid property and casualty producer license to qualify for a surplus lines license. The requirement would apply to both individuals and business entities. For applicants and licensing teams, that baseline matters regardless of how a state labels or organizes the surplus lines authority.

Comments and next steps

The revisions also add guidance on approving continuing education instructors. The source materials do not provide further detail on the proposed instructor criteria, so that part of the package will depend on the handbook text and any discussion at the task force meeting.

Written comments on the handbook revisions and additions should be sent to Tim Mullen, NAIC staff support for the Producer Licensing (D) Task Force, at [email protected] by Oct. 30. The task force will consider the handbook at its Nov. 5 meeting, alongside proposed revisions to the NAIC Independent Adjuster Licensing Guideline, the 1033 written consent process template and proposed 2027 task force charges. The agenda and meeting materials are expected to appear on the task force webpage.