An organization to streamline state-by-state agent and broker licensing could have been one presidential signature away from reality. The U.S. House of Representatives on Tuesday passed the Homeowner Flood Insurance Affordability Act, which was supposed to include language establishing the National Association of Registered Agents and Brokers, known as NARAB, as the U.S. Senate did on Jan. 30. However, NARAB was not in the final bill that passed the House.

“It wasn’t taken out but it just wasn’t included,” says Jill Hoffman, assistant vice president of federal government relations at the National Association for Insurance and Financial Advisors. “What the House passed is not identical to the Senate language [of the flood bill] and they didn’t put NARAB in. The reason, we were told from the Speaker’s office, is that they wanted a clean bill. … They needed a clean bill because of the dynamics of the flood insurance bill.”

NARAB is intended as a clearinghouse to cut through the red tape of licensing for insurance brokers across state lines; it 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.

Hoffman says her group will look for another “vehicle” to attach NARAB to in 2014, noting that the next insurance issue coming up is TRIA [the Terrorism Risk Insurance Act]. Another industry group, the Big “I,” says there’s a slight possibility that if the flood insurance bill goes to committee between the House and Senate, NARAB could be included in any final legislation sent to the White House. However, it’s not likely, according to the group.

Does anyone care?

Matt Cowan, president of Cowan Benefit Services, Inc. in Franklin, Tenn., has a 20-year-old established business and has lived through the pains of multi-state licensing. “It is certainly much easier today to be involved in multiple states because it used to be each state was completely different,” he says, explaining that he and his colleagues would have to keep careful records of mail correspondence between each separate state insurance commission. “It’s much easier today with the Web.” But, he says it’s still complicated.

“I have not heard of it,” he says, referring to NARAB. “I can see where it would work.”

NAIFA’s Hoffman says every initiative her lobbying arm takes on is a direct request from their members. “As staff, we are implementing what’s asked of us,” she says. “If people aren’t aware of what’s happening, they’re not reading or they’re not members of associations. Yes, we have members who don’t know about it. There’s a lot of spam filters and information out there, but at a certain point it’s incumbent upon the agents and brokers to keep in touch.”

She adds that the National Association of Health Underwriters is not actively lobbying for NARAB, so those who are just members of that organization might be less inclined to know about the initiative. NAHU was not immediately available to comment on why they have not been active in negotiations with Congress. Cowan says he is a member of NAHU and the International Society of Employee Benefits.

NARAB history

A standalone NARAB bill passed the U.S. House in September (H.R. 1155) but a re-vote was needed to reconcile with the Senate’s pairing of it with the flood insurance legislation due to an amendment threat on their standalone version by Sen. Tom Coburn (R-Okla.), who proposed that any state should be able to opt out of the bureau. Industry insiders like Hoffman say that would have gutted the bill. Most senators, however, were in favor of NARAB, which is why it eventually passed with the flood act.

Industry groups have been waiting for the passage of this organization through several congressional sessions, but Hoffman says there’s still strong support for it to happen this year. “We have many months left in this session and we’ve had two strong votes in each chamber,” she says.

The Health Agents for America, Inc. group was eager for the NARAB language to go to vote with the flood insurance bill. “The existing patchwork of state licensing requirements has caused countless insurance agents and brokers to lose clients that have moved to states in which the agent or broker was not licensed,” the group said in a statement. “This bill would make it easier for agents and brokers to conduct business in multiple states, while preserving state regulation of insurance and important consumer protections.”

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