NARAB II introduced in House and Senate

Agent groups in life insurance and property/commercial lines were all quick to come out in favor of the legislation, having smoothed out the politics of state-versus-federal insurance regulation over the past decade and a half. 

The current state regulatory system has worked effectively to maintain insurer solvency and protect consumers. However, the state-based system needs agent licensing reform, according to insurance agents of all stripes, some holding out hope that this is the time and place to get the long-awaited legislation passed once and for all.

“It’s difficult to imagine a better team of champions than Congressmen Neugebauer and Scott and Sens. Tester and Johanns. For a lot of reasons, we think that this is the session of Congress where we are most likely to reach the finish line on the long-held goal of creating a uniform nonresident agent licensing clearinghouse,” stated Ken Crerar, president of the Council of Insurance Agents and Brokers (CIAB), which has almost been synonymous with NARAB over the years.

“When we set out on this goal back in the early 1990s, there was little industry cohesion. Today, the industry is united. We feel a good bit of momentum and comity on this issue. This isn’t like horseshoes or hand grenades: close doesn’t count. We need to get this over the finish line,” Crerar stated.

CIAB first formed a task force to work on interstate nonresident producer licensing back in the 1930s.

“It’s time we finish the job,” Crerar said.

Insured Retirement Institute (IRI) President and CEO Cathy Weatherford noted that the bipartisan legislation promotes the efficient and cost-effective licensing of thousands of financial advisors across the country, while maintaining important consumer protections.

“We urge all members of Congress to support and advance this common-sense legislation to secure its promise of an improved and streamlined licensing process while retaining authority for the states to regulate the marketplace,” Weatherford stated.

NARAB II legislation would establish a one-stop, national licensing clearinghouse for financial professionals operating in multiple states. It would enable financial professionals who have passed background checks in their home state to apply for NARAB membership, allowing them to conduct business in other jurisdictions and bypass the burden of duplicative state licensing requirements across multiple states.

Rob Smith, president of the National Association of Insurance and Financial Advisors (NAIFA), said that NARAB II “encourages and supports this common-sense approach to eliminate the duplicative and burdensome state-by-state non-resident licensing. This will be a win for both insurance consumers and for agents, reducing unnecessary costs and establishing standards that exceed existing requirements.”

“NARAB II is critical for the tens of thousands of Big ‘I’ members who operate on a multi-state basis,” says Robert Rusbuldt, the Independent Insurance Agents & Brokers of America (IIABA or the Big “I”)president & CEO. “By providing a mechanism for establishing true nonresident licensing reciprocity, this legislation would improve licensing while ensuring that states retain the authority to regulate marketplace activity and enforce important consumer protection laws. As our members come to Washington, D.C. next month for our annual Legislative Conference, they will be meeting with members of Congress to urge them to support NARAB II.”