The establishment of a national clearing house for brokers to cut through the red tape of state-by-state licensing is one step closer to reality. On Thursday the National Association of Registered Agents and Brokers Reform Act of 2013 passed the U.S. Senate Banking Committee after markup. The bureau would be known as NARAB and would have a 13 member board appointed by the president and confirmed by the Senate, in addition to requiring federal criminal background checks for all brokers who become members.
“This bill streamlines the licensing of registered agents and brokers while maintaining strong, state regulation of the insurance industry and protecting the ability of state insurance regulators to regulate insurance markets and protect consumers,” Sen. Jon Tester (D-Mont.), the sponsor of the bill along with Sen. Mike Johanns (R-Neb.), said in a statement.
The bill, known at NARAB II because of various iterations of the proposal in different congressional sessions, is S.534 and has also been introduced in the House as H.R. 1155. The bill’s introduction in March was covered by EBA and was the first time the legislation was endorsed by the National Association of Insurance Commissioners.
Jill Hoffman, assistant vice president of federal government relations at the National Association of Insurance and Financial Advisors, was on hand at the markup last week. “It is an almost impossible task to achieve the level of consensus that we have achieved for NARAB II,” she says. “And we feel very positive about it.”
Hoffman says the only senator who seemed cautious about the bill was Sen. Tom Coburn (R-Okla.), who proposed an amendment “that would have allowed any state to opt out, which would gut the bill.” It did not pass.
Another notable amendment was proposed by Sen. Elizabeth Warren (D-Mass.), who wanted to broaden the make-up of the board. “The original language said it should be [five] representatives in the industry and the way the language was changed was to be experts with experience in the producer licensing in property and casualty and life and health agents so it makes it a little broader … and so she’s supportive of the bill,” Hoffman says, confirming that Warren’s amendment passed.
NARAB will not receive any funding from the federal government. Hoffman says that if the bill becomes law that fundraising would likely be the first step for the newly created agency.
“The bill will now be sent to the full Senate for approval,” said Senate Banking Committee Chairman Tim Johnson (D-S.D.) in a statement. Hoffman says the goal is for quick action.
Photo courtesy of Senator Tester's office.
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