Legislation was scheduled to be introduced in the House last week designed to provide for streamlined non-resident insurance agent and broker licensing.
If enacted, the legislation would establish the National Association of Registered Agents and Brokers (NARAB), a non-profit organization that would oversee licensing standards and interstate reciprocity on a national scale.
NARAB-II, as it is being called, is based on the NARAB provision contained in the 1999 Gramm-Leach-Bliley Act, which was never implemented because a sufficient number of states reached the threshold the act provided to ensure uniformity.
The legislation was introduced by Rep. David Scott, D-Ga., and Geoff Davis, R-Ky.
Jeffrey Taggart, president of the National Association of Insurance and Financial Advisors, said, “Insurance regulatory reform is a top priority for NAIFA, and NARAB II is a positive step in that direction.”
But he noted that NAIFA is also currently evaluating its position on comprehensive reform legislation such as the National Insurance Act, often referred to as the optional federal charter (OFC).
“Our support of NARAB II should not be interpreted as an early indicator that NAIFA plans to either oppose or support OFC legislation,” Taggart said.
But Steve Brostoff, a staff official at the American Council of Life Insurers, said life companies don’t support the NARAB-II concept. “ACLI believes that insurance regulation needs comprehensive reform, and the best way to achieve it is with an optional federal charter system,” Brostoff said.
At the same time, Taggart said NAIFA “is currently undergoing an exhaustive, thorough review of what the OFC could mean for advisors and agents, and we remain open to all legislative proposals that could benefit our members and ultimately the consumers they serve.”
Taggart also said NAIFA is undertaking an information and education campaign to help NAIFA members to better understand the implications and impact of the OFC “and how it could improve consumer protection and foster greater uniformity in all areas of insurance regulation, including producer licensing.”
According to NAIFA officials, the proposed legislation would not reduce the standards for agents to be licensed.
Rather, it would allow producers who are licensed and operate in multiple states to comply with a single set of licensing and continuing education rules, NAIFA officials said.
The NARAB standards would be determined by a board made up of insurance commissioners, producers and insurance companies.
Through the NARAB II legislation, insurance agents would be able to apply for membership in NARAB and subsequently obtain a license in states other than their home state by paying the required state licensure fees, NAIFA officials said.
Non-home states would be prohibited from imposing additional requirements or qualifications on NARAB member to do business, they explained.