Bipartisan legislation to introduce National Association of Registered Agents & Brokers Act of 2013 (NARAB II), which would streamline the insurance agent licensing process legislation has been introduced in both the House and the Senate with a Senate Hearing scheduled for next week, a watershed legislative event for the insurance agent industry.
In the House, Rep. Randy Neugebauer, R-Texas, joined Rep. David Scott, D-Ga., to introduce the bill to create a national agent/broker licensing entity for nonresident licensing on a multistate level.
The new licensing entity, if created by law, would be governed by a 13-member panel of state regulators and insurance industry representatives.
“The NARAB Reform Act will protect consumers, while also allowing for greater relief for those in the insurance industry who have struggled under burdensome regulations. I urge my House colleagues to support this legislation in order to modernize the system currently in place,” Scott stated.
Neugebauer and Scott said they drafted H.R. 1064 to maintain the successful state-based system of insurance regulation while improving consistency and streamlining procedures from state to state.
The NARAB reform act only relates to marketplace entry and would not impact the day-to-day state regulation of insurance. NARAB would not be part of, or report to, any federal agency and would not have any federal regulatory power, supporters assured.
However, the new system would bring “much-needed reciprocity in producer licensing through a board of state commissioners and industry representatives,” the bill’s sponsors stated.
The legislation also would provide higher and more consistent national consumer protections for those agents utilizing NARAB, its supporters say, as well as preserve the rights of states to supervise and discipline agents and brokers.
“We write today on behalf of the National Association of Insurance Commissioners (NAIC) in support of the National Association of Registered Agents and Brokers Reform Act of 2013,” the NAIC leadership wrote March 8 to the Congressional sponsors of the legislation.
“Agents and brokers play an important role in the insurance marketplace by ensuring consumers are able to obtain insurance products that best fit their needs. State regulators’ authority and oversight over agents and brokers provide critical protections to consumers of insurance products. The NARAB II legislation preserves these protections and provides appropriate measures for implementation of the NARAB, an entity already referenced in the Gramm-Leach Bliley Act,” wrote the NAIC leadership led by Jim Donelon, NAIC president and Louisiana insurance commissioner.