The ball is in the U.S. House of Representative’s court after the U.S. Senate on Thursday passed S.1926, the Homeowner Flood Insurance Affordability Act, which contained language to create the National Association of Registered Agents and Brokers. 

NARAB would be a clearinghouse to cut through the red tape of state-by-state licensing for insurance brokers. The bill calls for the creation of a 13-member board appointed by the president and confirmed by the Senate. Members would be subject to background checks prior to joining.

“On behalf of the quarter of a million professionals we represent across the country, we thank the bill sponsors and Senate leadership in both parties for their efforts to make this happen,” said Charles Symington, Big “I” senior vice president for external and government affairs, in a statement.

“We’re hopeful that this is the year we get it over the finish line,” says Jill Hoffman of government relations for the National Association of Insurance and Financial Advisors.

While NARAB II, named because of various iterations of the bill, passed the U.S. House in September as a standalone bill (H.R. 1155), it will have to pass the House again as part of that chamber’s own flood insurance bill, in congruence with the Senate’s actions Thursday. The vote on S.1926 was 67-32.

How it got here

The attachment of NARAB language to flood insurance legislation was due to an amendment threat by Sen. Tom Coburn (R-Okla.), a member of the Committee on Banking, Housing and Urban Affairs, on the original legislation.

Earlier this year the Senate’s standalone version of NARAB II, S.534, went through committee markup and most senators were in support of the bill. However, Coburn proposed an amendment that would allow any state to opt out of the bureau — which NAIFA’s Hoffman said at the time would “gut the bill.” When Coburn refused to let the bill go to the floor without his amendment, bill sponsors opted to approach the flood insurance bill sponsors, says Joel Kopperud, vice president of government affairs at the Council of Insurance Agents & Brokers.

The sponsors of the flood insurance legislation are Sens. Robert Menendez (D-N.J.) and Johnny Isakson (R-Ga.). The sponsors of the original NARAB II legislation are Sens. Jon Tester (D-Mont.) and Mike Johanns (R-Neb.).

Next steps

John Prible, vice president of federal government affairs at The Big “I,” said last week that the House and Senate flood insurance language is different, and that the House has yet to even introduce the legislation, so the process could take some time this year. NARAB II language in both chambers, however, is nearly identical.

In an official statement of administration policy released on Monday night, the White House praised S.1926 but took issue with a few pieces of the plan. First, the background check requirement was not in line with “the normal process the FBI uses to conduct thousands of such background checks,” it said. And second, the administration has “constitutional concerns with the requirement that the president reserve eight of the thirteen positions on the NARAB Board of Directors for state insurance commissioners.”

“If the White House has a problem with the board, we view that as an issue between regulators,” says NAIFA’s Hoffman, explaining that the bill as it stands now was crafted as a way of appeasing the National Association of Insurance Commissioners. “However, the NARAB board needs to be structured to get this passed, we’d support it.” She adds that the background check issue will likely be corrected in the House version of the bill.

The White House did not, however, threaten a veto.

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