On Thursday, the U.S. Senate passed a bill to re-establish the National Association of Registered Agents and Brokers (NARAB II), legislation that aims to ease the ability of brokers to sell insurance in states across the U.S. The House of Representatives approved the same bill a day earlier.
House Financial Services Committee Chairman Jeb Hensarling (R-Tex.) said Monday he intended to fast-track a vote to renew the Terrorism Risk Insurance Act (TRIA), the bipartisan bill to which the NARAB II legislation is attached.
The Independent Insurance Agents & Brokers of America (the Big I) applauded the bill's passage, saying NARAB II would achieve much needed reciprocity in producer licensing and help policyholders by permitting greater competition among agents and brokers.
TRIA and NARAB II "will benefit thousands of small businesses and insurance consumers across the country, said Bob Rusbuldt, Big I president and CEO. "Long awaited reform on non-resident licensing for agents is finally coming.
The Council of Insurance Agents and Brokers also lauded the bill's passage. "A national licensing system will strengthen the competitive insurance market, allow agents, brokers and their firms operating on a multi-state level to avoid duplicative licensing requirements and maintain important consumer protections."
CIAB expects NARAB to work closely with NIPR "the online licensing service that provides an electronic mechanism for agents and brokers to obtain state resident and non-resident licenses." The National Association of Insurance Commissioners and state regulators "will have strong and important voices in its operation," CIAB said. "Given the complexities of establishing the system, it is likely to take some time to get up and running."
Big "I" Senior Vice President of External and Government Affairs, Charles Symington, said the legislation would build upon regulatory experience at the state level, promote greater consistency in agent and agency licensing, and ease the burden that many agents face in doing business across state lines.
In December, the House passed an identical bill, which insurance industry experts largely expected the Senate to pass as well. Instead, the Senate convened in mid-December without ever bringing the bipartisan bill up for vote.
See related: Broker licensing bill dies in Senate
NARAB II legislation would create the National Association of Registered Agents and Brokers, a federal clearinghouse that would cut through the red tape of state-by-state broker and agent licensing, streamline the licensing process and allow for brokers to sell insurance in states across the U.S.
The National Association of Insurance and Financial Advisors has actively lobbied legislators for the bills passage.
NARAB II is a top priority for NAIFA, says NAIFA President Juli McNeely. The legislation benefits consumers as well by allowing them to maintain their preferred insurance agent or broker should they move to or from our state.
Insurance agents and brokers have been waiting for years to bring meaningful reciprocity, like NARAB II, to the agent licensing process, she adds.
NARAB II would streamline the non-resident producer licensing process but preserve the states ability to protect consumers it does not create a federal regulator for insurance and the states would retain their regulatory authority over consumer protection, market conduct and unfair trade practices, according to a brief on the bill by the National Association of Insurance Commissioners. The states also would retain their rights over resident licensing, as well as supervision, discipline and the establishment of licensing fees for insurance producers, NAIC adds.
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