The National Association of Registered Agents and Brokers doesn’t exist yet, outside of a few iterations of legislation, but it could ease the way the entire benefit broker, agent and adviser industry does business. While the bill to pass this idea has hit a few bumps in the road this congressional session, the trade organization National Association of Insurance and Financial Advisors is poised and determined to get NARAB II, as it is known, passed before the end of the year.

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“NARAB is one of the few issues that we’ve finally gotten most of the lawmakers to agree it’s a good idea,” said Diane Boyle, vice president of federal government relations for NAIFA, at a legislative briefing Tuesday; the group has assembled members in Washington this week and are set to lobby lawmakers Wednesday. NAIFA’s legislative team reiterated that the top two legislative priorities for the year are getting NARAB II passed and communicating the need to limit additional insurance-related taxes in any future tax reform discussions.

NARAB II would establish a federal clearinghouse to cut through the red tape of state-by-state broker and agent licensing. “If you’re licensed in a state, you’re still subject to all that state’s laws. The commissioners and regulators do not lose authority,” said Jill Hoffman assistant vice president of federal government relations at NAIFA, explaining that this is not a federal takeover but a helpful asset for brokers to follow clients across the nation. There will be no requirement for brokers to join the NARAB organization if passed. But, in order to gain membership, brokers will have to undergo a federal background check.

How it can pass

NAIFA’s legislative team informed members that there is “bi-partisan support” for lawmakers to attach NARAB II to another insurance bill set to go through Congress soon, the Terrorism Risk Insurance Act, known as TRIA. They urged members in their lobbying efforts this week to let senators know that NARAB II must be added to TRIA and to inform those in the House that NARAB II must not be dropped from TRIA.

NARAB II was previously attached to flood insurance legislation that passed in the U.S. Senate but was dropped from the version that passed the U.S. House of Representatives and signed into law.

TRIA was initially passed in 2002 to ensure that insurance carriers can continue to issue policies and accept claims, with a backstop of federal funding, following an act of terrorism. The current bill is set to expire in December and while reauthorization was introduced in the U.S. Senate in April, it has not been filed in the House yet.

The Independent Insurance Agents and Brokers of America or Big “I” also focused on NARAB II at their legislative conference held last month noting that they were “cautiously optimistic” about its passage via TRIA.

NARAB history

A standalone NARAB II bill passed the House in September (H.R. 1155). However, 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 own 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 NAIFA’s Hoffman said that would have gutted the bill. Most senators, however, were in favor of NARAB II, 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, and Hoffman noted at Tuesday’s conference that if it doesn’t pass this year “the whole process will start over again” with fresh bills needed in 2015.

The Health Agents for America Inc. is another group favoring the legislation: “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 in April. “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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