WASHINGTON BUREAU — A bipartisan team plans to introduce a new National Association of Registered Agents and Brokers Reform Act (NARAB II) bill in the House within 10 days.
The lead sponsors are expected to be Reps. Randy Neugebauer, R-Texas, and. David Scott, D-Ga.
Neugebauer has issued a statement confirming that he plans to re-sponsor the bill.
“This legislation will help reform and modernize a very important part of state insurance regulation: agent and broker licensing,” Neugebauer says.
The NARAB II bill would:
- Establish NARAB as a national, nonprofit producer licensing corporation.
- Encourage NARAB to develop one set of producer licensing and continuing education standards for the entire country.
- Give producers who are licensed in various lines in their home states the ability to conduct business in those lines in any state.
- Let states keep regulatory jurisdiction over consumer protection, market conduct and unfair trade practices matters.
- Let states continue to handle producer licensing, supervision, disciplining and licensing fee collection.
Neubebauer says adoption of the NARAB II bill would help consumers by increasing competition among producers and giving consumers more choices.
“The legislation is straightforward: insurance agents and brokers who are licensed in good standing in their home states can apply for membership to the National Association of Registered Agents and Brokers, which will allow them to operate in multiple states,” Neugebauer says. “Our legislation
addresses only market-entry procedures. It would not impact the day-to-day state regulation of insurance, and insurance agents would still be subject to the various consumer protection laws of the states.”
A NARAB bill passed in the House in March 2010 but failed to get through the Senate.
Terry Headley, president of the National Association of Insurance and Financial Advisors, Falls Church, Va., has welcomed news that a new NARAB bill will be introduced.
“NAIFA has been a strong supporter of agent licensing reform for many years and we appreciate the continued bipartisan efforts of Neugebauer and Scott, who have worked to ensure this bill is enacted into law,” Headley says. “The majority of NAIFA members are licensed in multiple states and the different licensing requirements of each state are often redundant and costly. NAIFA is proud to support NARAB II because it just makes sense to eliminate unnecessary costs and duplicate regulation that make it more difficult to serve our clients on Main Street who depend on us.”
The Gramm-Leach Bliley Financial Services Modernization Act of 1999 created a NARAB provision. The provision was written in such a way that it would have brought NARAB to live and imposed uniform producer oversight rules if a minimum number of states had not agreed to comply with act uniformity provisions.
Enough states complied with the uniformity provisions to keep NARAB from coming to life.
Although the minimum required number of states complied with the NARAB uniformity provisions, large states such as California, Florida, New York and Washington did not. Producers say the absence of the largest states from the uniformity efforts has reduced the ability of agents to sell insurance across state lines.