The House Financial Services Committee recently approved an amendment adding the National Association of Registered Agents and Brokers Act (NARAB II) to the TRIA Reform Act of 2014 (H.R. 4871).
In a press release issued by the Washington, D.C.-based Insured Retirement Institute (IRI; http://www.irionline.org), IRI president and CEO Cathy Weatherford states, “NARAB II would remove a regulatory barrier that impedes broker-dealers’ ability and financial advisors’ willingness to sell lifetime income products.
At the same time, this commonsense legislation maintains important consumer protections and preserves each state’s authority to regulate the insurance marketplace. Securing passage of NARAB II remains one of IRI’s top legislative priorities, and we will continue to work with congressional leaders to achieve this goal.”
Senior vice president and general counsel Lee Covington manages and oversee IRI’s Government Affairs. I asked him why this legislation matters for retirement advisors. Here are his e-mailed responses:
LifeHealthPro: Can you explain why the current regulation presents a regulatory barrier for lifetime income products? Also, can you provide detail on how you’re defining “lifetime income products”?
Lee Covington: IRI conducted a study of the regulatory environment to determine what barriers could be precluding the availability of lifetime income products. We found that maintaining state insurance licenses across multiple jurisdictions is a regulatory obstacle that may impede broker-dealers’ ability and financial advisors’ willingness to sell lifetime income products such as annuities. In a mobile society, with clients relocating to other states on a regular basis, NARAB II would ensure that these clients could continue to work with their financial professional and still have access to a full suite of lifetime income strategies, without forcing the advisor to overcome the burden of redundant insurance licensing requirements.