WASHINGTON–The House could act on bills reforming regulation of the reinsurance industry and streamlining nonresident insurance agent and broker licensing by next month, industry officials say.
The bills are The Non-Admitted and Reinsurance Reform Act of 2009, H.R. 2571, and the National Association of Registered Agents and Brokers Reform Act, H.R. 2554. They were introduced in May.
They could be dealt with under expedited procedures on the House floor as early as the week of July 6, when Congress returns to work from its brief Independence Day recess, according to some industry lobbyists.
But others are more cautious, saying action is more likely to take place sometime in July.
Washington officials of trade groups with interest in the bills say that two ranking House members have agreed to allow the bills to proceed to the floor without the need for committee action. Those members are Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, and Rep. Paul Kanjorski, D-Pa., chairman of the panel’s key Capital Markets Subcommittee.
The bills are being allowed to bypass the committees because they are the same as bills passed by the full House last September, and because they have broad, bipartisan support, the lobbyists said.
But nothing is a given on Capitol Hill, cautions Joel Wood, senior vice president of the Council of Insurance Agents and Brokers.
“It’s just that we feel good that House FSC leaders have been supportive once again of moving the surplus lines [and reinsurance] legislation,” Wood says. “Were it not for the financial meltdown, we were in a pretty good position to see the bill through to enactment last year, but understandably we couldn’t get the requisite oxygen in that environment. Hopefully, House action again will afford us an opportunity to see the legislation through. And we are grateful for the support for the legislation we’ve heard from a number of members of the Senate.”
The reinsurance-surplus lines bill was also introduced in the Senate Thursday as S. 1363. There is no companion legislation in the Senate for the NARAB bill.
The reinsurance part of the legislation would preempt state insurance regulators from intervening in reinsurance agreements of ceding insurers domiciled in other states.
The NARAB measure would create a National Association of Registered Agents and Brokers, facilitating streamlined nonresident insurance agent and broker licensing.
The measure would preserve state insurance regulation and consumer protection provisions but would require agents applying for membership to submit to a criminal background check. Currently, only 17 states require a federal criminal background check for producers.
R.C. Chaffin, eastern region vice president of the American Association of Managing General Agents, says his group “has been working alongside other industry groups in drafting, providing information to legislators, and ensuring the positive momentum to get surplus lines reform passed remains a top priority on the Hill.
H.B. 2571 is critical to producers who have clients with businesses in more than one state, he says.
“The reforms proposed in this bill will help modernize our industry’s ability to comply with all appropriate rules and tax reporting requirements in all 50 states,” he says.
Charles Symington, senior vice president of government affairs for the Independent Insurance Agents and Brokers of America, said his group hopes the House can take up the 2 pieces of legislation by August.
“In particular, the NARAB-II legislation introduced by Rep. David Scott, D-Ga., and Rep. Randy Neugebauer, R-Texas would be a strong step forward in dealing with the problem of overlapping non-resident agent licensing requirements,” Symington says.
Cliff Wilson, president of the National Association of Insurance and Financial Advisors, said that passage of NARAB II “would be a win for both consumers and the agents that serve them.”