The Insured Retirement Institute is seeking to re-energize support for long-stalled federal legislation, the purpose of which is to ease the licensing burden on insurance agents.
The legislation would establish the National Association of Registered Agents and Brokers or NARAB.
The legislation was introduced in the Senate in April by Sen. John Tester, D-Mont., and Sen. Mike Johanns, R-Neb, S. 2342. Companion House legislation was introduced last year as H.R. 1112.
The IRI plan is to launch a new research initiative that would identify regulatory burdens facing broker-dealers that impede their ability, and financial advisors’ willingness, to sell such products as annuities.
The research initiative announcement was made by IRI Senior Vice President and General Counsel Lee Covington at the outset of the 2012 IRI Government, Legal, and Regulatory Conference, now underway in Washington, D.C.
IRI intends for the research to support its efforts to pursue a one-stop, national insurance agent licensing system, as well as reforms to address other regulatory hurdles, according IRI president and CEO Kathy Weatherford.
“We are focused and committed to working with policymakers to reduce barriers to attaining lifetime income so that all Americans may enjoy a financially secure retirement,” she says. “This includes identifying and removing regulatory red tape and other obstacles that are preventing the broker-dealer community from making insured retirement strategies more readily available.
“Our new research initiative will serve as the backbone for these efforts, including IRI’s support of legislation that promotes the efficient and cost-effective licensing of thousands of financial advisors across the country,” she adds.
NARAB would create a one-stop, national licensing clearinghouse for financial professionals operating in multiple states. The bill would enable financial professionals that have passed background checks in their home state to apply for NARAB membership, allowing them to sell insurance products in other states and bypass the burden of duplicative state licensing requirements across multiple states.
The legislation was originally included in the Gramm-Leach-Bliley Act of 1999, but would have been implemented only if two-thirds of the states did not take steps to make their licensing processes easier to access by out-of-state agents. Because the required number of states complied within the required time period—but none of the larger states that comprise most of the agent community—the provision was not implemented.
The Independent Insurance Agents and Brokers is a strong supporter of the legislation. IIABA sent a letter to the Treasury Department earlier this year asking the Obama administration to support NARAB.
The letter said that data provided by the National Insurance Producer Registry in September 2009 shows that nearly 2.3 million individuals are licensed as insurance producers in at least one jurisdiction. And they collectively hold more than 6.2 million insurance licenses.
The IIABA letter sent to Treasury added that its research had found that approximately 232,000 individuals—or more than 10% of all individual producers—are licensed in five or more jurisdictions.