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Regulation and Compliance > State Regulation

Reform Debate Surfaces In Key D.C. Paper

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Insurance agent groups have been dueling on The Hill over regulatory reform.

Robert Rusbuldt, chief executive of the Independent Insurance Agents and Brokers of America, Alexandria, Va., recently faced off in the closely read Capitol Hill paper against Peter Ludgin, executive director of Agents for Change, Washington.

Rusbuldt calls in his op-ed for “vigorous, but targeted” changes in the current state regulatory system.

The foundation would be a new version of the National Association of Registered Agents and Brokers, a product of the Gramm-Leach-Bliley Financial Services Modernization Act of 1999. Lawmakers formed NARAB in an effort to increase uniformity in state producer licensing.

“NARAB II,” a new producer licensing entity described in Rusbuldt’s op-ed, would be managed by a board that would include an independent agent and other insurance industry representatives as well as state insurance regulators.

“Agents and brokers comfortable with the current system and those licensed in one or a couple of states could choose to remain licensed in the traditional manner with no outside interference,” Rusbuldt writes. “Producers operating in multiple jurisdictions unhappy with the current licensing burdens, however, could opt for NARAB and the ease of national licensing through a self-regulatory organization (SRO)-type entity separate and apart from the federal government.”

Federal legislation also could build upon the interstate compact for filing of life, disability and long term care policy forms that recently was created by the National Association of Insurance Commissioners, Kansas City, Mo., Rusbuldt writes.

Ludgin, the head of Agents for Change, writes in an op-ed in another edition of The Hill that Rusbuldt’s proposal would be a mere Band-Aid for what ails the current insurance regulatory system.

“Today, some of the largest markets are not fully participating in NARAB, many states are not truly reciprocal, and [NARAB] has done little to fix agency licensing problems,” Ludgin writes.

For insurers needing to file products and forms, the NAIC’s new interstate compact “is a positive step in the right direction,” Ludgin concedes. “But it has also proved just how difficult it is to get 56 jurisdictions on board without federal intervention. Only 28 states, representing 44% of the premium volume, have approved the compact…. Almost 4 years after the initial model was adopted, it has now just reached the point where it can become operational.”

Agents for Change believes that an “optional federal charter” measure that would give insurers and agents a choice between state and federal regulation would be the right fix,” Ludgin writes.


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