Federal legislation designed to streamline non-resident insurance agent and broker licensing passed the U.S. House of Representatives.
H.R. 2554, the National Association of Registered Agents and Brokers Reform Act of 2009, or more commonly referred to as NARAB II, passed on the suspension calendar, a forum used for passing non-controversial pieces of legislation. Reps. David Scott, D-Ga., and Randy Neugebauer, R-Texas, introduced the bill in the 111th Congress in May 2009 with more than 44 additional co-sponsors.
Similar legislation, H.R. 5611, passed the full House in September 2008 but never attained a Senate vote.
The bill would establish a national organization, NARAB, which producers could join that would be responsible for establishing one set of licensing, continuing education, and other insurance producer qualification standards that could be adopted and applied on a multi-state basis for states in which they do business.
While establishing a national licensing system, it would still allow states to license, supervise, discipline, and establish licensing fees for insurance producers, as well as to prescribe and enforce laws and regulations with regard to insurance-related consumer protection and unfair trade practices.
Enacting NARAB II would also provide greater competition among NARAB members, a benefit to policyholders, some industry groups say.
“Although the state insurance regulatory system has worked effectively to ensure insurer solvency and look after policyholders, the system does need improvement in the area of agent licensing,” says Robert Rusbuldt, president and CEO of the Independent Insurance Agents & Brokers of America (the Big “I”). “H.R. 2554 would reform and improve the current system of insurance regulation by providing one-stop, non-resident licensing reciprocity.”
Insurers also support the legislation, calling the bill “common sense” reform that levels “the playing field between states for agents, allowing licensed agents to offer their services across all jurisdictions without impeding on the regulatory rights of the states themselves.”
Marliss McManus, senior federal affairs director for the National Association of Mutual Insurance Companies (NAMIC), says “this approach would streamline the current regulatory system and establish uniform and consistent standards, while leaving the day-to-day regulatory control at the state level.”
McManus adds, “This common sense reform will help ensure that customers have a vibrant, competitive marketplace as they shop for insurance coverage.”
“NARAB II would build upon regulatory experience at the state level, promote consistency, and preserve marketplace responsiveness by establishing true nonresident licensing reciprocity for the thousands of independent insurance agents and brokers who operate on a multi-state basis,” says Charles Symington, Big “I” senior vice president of government affairs.
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