Testing undergoes changes

Taking an exam in the rear of a semitrailer is usually not a good thing.

That's one of the reasons the Indiana Department of Insurance is making the transition this month to a paperless system that should make it easier for agents to receive and renew their licenses.

The change to an online

Baltimore-based Thomson Prometric's contract with the state expires at the end of the year. The company declined to bid on a new pact after department officials challenged its testing procedures, Insurance Commissioner Jim Atterholt said. The state instead chose Carmel-based Performance Assessment Network Inc., which was acquired by St. Louis-based TALX Corp. for $75 million in April.

Questionable test locations and scores led the state to revamp the system and seek another provider. Thompson furnished only six sites throughout the state where people could take the exam, and some of those were in the rear of semitrailers' or rented storefronts with limited hours, the department charged.

Moreover, several of the test questions became so complex and cumbersome, insurance veterans within the department couldn't decipher them, Atterholt said. The confusion led to failure rates plummeting from roughly 65 percent to below 50 percent.

Department officials accuse Thomson of purposely muddling the exams to profit from the increase in retakes. The $68 cost to take the test rises to $84.75 this month. People can take the test as many times as they want within six months of completing the required 40-hour course. Roughly 8,000 tests are administered every year.

Officials say problems first arose in 2004 following Thomson's acquisition of Experior, the state's former test provider, from the Educational Testing Service, a New Jerseybased not-for-profit.

"Imagine how many people were discouraged from getting into this industry because the locations were closed, or the failure rate was too high," Atterholt said. "We're not trying to make it easier; we're trying to make it fairer."

In an e-mailed response to the charges, Thomson admitted that, in September and October 2005, the company did use a "state-of-the-art mobile test center" to accommodate a rapid increase in the volume of test-takers.

"Our multimillion-dollar, climate-controlled mobile centers are designed to replicate in every way the professional, secure environment found in our permanent testing facilities," the company said.

Online access

Besides using PAN to supply the exams, the state also has contracted with Ivy Tech Community College to make testing centers more accessible. The school has 25 locations around the state.

Moving from a paper to an electronic licensing system will follow by the end of the year. That means test-takers can register, schedule and pay for their exams via credit card online. And instead of having to wait six weeks for results, they will know immediately whether they passed, enabling them to begin selling policies as soon as the same day.

Ivy Tech became interested in the state's insurance program for many reasons. The college is among several entities offering preparatory classes for licensure. Next spring, Ivy Tech will reintroduce an insurance specialty under its associate of business degree.

"Interest kind of waned, and now we've had requests from different insurance companies around the state," said Heather Higgs, Ivy Tech's director of academic support systems. "After so many requests, we begin to initiate programs to respond to that need, and that's how this one definitely came about."

The college already has established testing centers serving other professions in which certifications or licenses are necessary, Higgs said.

Once licensed, insurance agents must complete 40 hours of continuing education every fours years to remain in good standing. The changes allow education providers to submit the number of hours agents complete. Then, agents can their hours and pay the $40 renewal fee electronically instead of by check.

The addition of a database to log hours makes it impossible for agents to try inflating the number they actually have completed, which occasionally happens, Chief Deputy Commissioner John R. Kissling Jr. said. He and Chet Pietras, deputy commissioner of the agent licensing division, helped lead the overhaul.

More renewals?

Next up on the department's agenda is requiring agents to renew their licenses every two years instead of four. Officials are talking to legislators in an attempt to gain support for the measure, which would need approval from the General Assembly.

Indiana is among the few states that let agents renew their licenses every four years. Moving to a two-year cycle would get Indiana in sync with the rest of the nation, the department reasons. There are 108,000 insurance agents who conduct business in Indiana, many of whom are licensed in multiple states.

If lawmakers pass the legislation, agents would need to complete 20 hours of continuing education every two years.

Agents are less supportive of that proposal than they are of the switch to an online system, said Roger Ronk, executive vice president of the Independent Insurance Agents of Indiana.

"It's going to take some time to work through the issues and to get people's records on there," he said. "But long term, it will serve us well because most agents have licenses in multiple states now."

Steve Williams, president of the Insurance Institute of Indiana, which mainly represents the property and casualty sector, concurred.

"[The Insurance Department is] trying to take a major leap forward in technology, and we certainly applaud that," he said. "It becomes cost-effective, time-effective and far more user-friendly."

Indiana will begin using a system from Michigan-based Sircon Corp. that enables the department to better track agent licenses, as well as providing the additional licensing services.

Sixteen states use the same system, and a half-dozen more are wired to a similar network from the Kansas City, Mo.-based National Association of Insurance Commissioners. The two are compatible, allowing states to tap into the systems and maintain better records. In a four-year span, a lot of insurance agents can move or leave the profession, Kissling said.

The state's relationship with Ivy Tech continues its push to link higher education with the insurance industry. An initiative of the Indiana Economic Development Corp. promotes the state's skilled work force and university programs as an asset for insurers looking to locate or expand here.

Both Ball State University in Muncie and Indiana State University in Terre Haute have insurance and riskmanagement departments, giving Indiana the distinction of being one of only a handful of states that hosts two programs.