The chairman of The Council of Insurance Agents and Brokers said much work needs to be done to stop state legislatures from dragging their heels in passing insurance agent/broker licensing reforms.
In testimony to the Senate Subcommittee on Securities, Robert Gleason called on Congress to help the licensing reform process by giving states access to a federal database to perform criminal background checks. He told the subcommittee he is concerned that some state legislatures will not move quickly to adopt the National Association of Insurance Commissioner’s Producer Licensing Model Act, providing full licensing reciprocity for out-of-state agents and brokers.
“Many states may decide to let other states take the lead,” Gleason testified. “Agent groups in some states may fight to retain laws that discriminate against out-of-state agents and brokers. And other states will have legitimate disagreements over provisions of the Licensing Model Act. In order to overcome these obstacles, much work has to be done.”
Reciprocity in agent/broker licensing is required under the National Association of Registered Agents and Brokers provision of the Gramm-Leach-Bliley Act passed last year. The NAIC recently passed the Producer Licensing Model Act, and states that adopt the model would meet the reciprocity requirements of the NARAB provision.
However, Kentucky is the only state that has adopted the model; 28 other states and territories must also adopt the model law to meet a November 2002 deadline imposed in the Gramm-Leach-Bliley Act.
If the states and territories do not meet the deadline, NARAB will be created as a stand-alone organization with the authority to preempt certain state laws and act as a national agent/broker licensing clearinghouse.
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