House Approves Recreation of NARAB

Under the terms of the bill, an insurance producer would be allowed to conduct insurance business in any state in any line of insurance specified in the producer’s home state.

States would retain their regulatory jurisdiction over consumer protection, market conduct and unfair trade practices. They also would retain their rights over licensing, supervision, disciplining and the setting of licensing fees for insurance producers.

NARAB would coordinate with state insurance regulators to establish a central clearinghouse and the creation of a national database for “the collection of regulatory information concerning the activities of insurance producers.”

According to the bill, NARAB will still need to establish the criteria for membership, including a criminal background check and a procedure to deny membership to a state-licensed insurance producer on the basis of criminal history.

The original NARAB reciprocity plan under Gramm-Leach-Bliley would have been triggered if enough states had not demonstrated reciprocity licensing laws. However, some of the major insurance markets, such as New York, never established licensing reciprocity.

Mr. Ludgin says that recreation of NARAB would be “building on a broken chassis.”

He said that agent licensing is a “costly, time consuming, and burdensome morass, creating unnecessary hoops that producers are forced to jump through to serve their customers.”

He said the bill only “tangentially addresses much-needed licensure reform, but does nothing to address speed to market of products or free market pricing.”