NU Online News Service, June 26, 3:53 p.m.EDT

WASHINGTON-Bills modernizing and reforming regulationof the surplus lines and reinsurance industries and streamliningnonresident insurance agent and broker licensing could be acted onby the full House next month, according to industry officials.

The bills are the Non-Admitted and Reinsurance Reform Act of2009, H.R. 2571, and the National Association of Registered Agentsand Brokers Reform Act, H.R. 2554. They were introduced in May.

The bills could be dealt with under expedited procedures on theHouse floor as early as the week of July 6, when Congress returnsto work from its brief Independence Day recess, according to someindustry lobbyists.

But others are more cautious, saying action is more likely totake place sometime in July.

According to Washington officials of trade groups with interestin the bills, the two ranking members of the House FinancialServices Committee–Rep. Barney Frank, D-Mass., chairman, and Rep.Paul Kanjorski, D-Pa., chairman of the panel's key Capital MarketsSubcommittee–have agreed to allow the bills to proceed to the floorwithout the need for committee action.

The reason the bills are being allowed to bypass committee isthat they are the same as bills passed by the full House lastSeptember, and because they have broad, bipartisan support, thelobbyists said.

Joel Wood, senior vice president of the Council of InsuranceAgents and Brokers, cautioned that nothing is a given on CapitolHill, but added, "It's just that we feel good that House FSCleaders have been supportive once again of moving the surplus lineslegislation.

"Were it not for the financial meltdown, we were in a prettygood position to see the bill through to enactment last year, butunderstandably we couldn't get the requisite oxygen in thatenvironment," he said.

The surplus lines and reinsurance legislation bill was alsointroduced in the Senate Thursday as S. 1363. There is no companionlegislation in the Senate for the NARAB bill.

The surplus lines and reinsurance legislation would allowbrokers representing large policy holders to go directly to thenonadmitted market to purchase insurance; require all surplus linescarriers to meet certain financial, capital and other criteria inorder to be eligible to provide surplus lines insurance in states;and preempt state insurance regulators from intervening inreinsurance agreements of ceding insurers domiciled in otherstates.

It also contains a provision inserted in the bill in the lastCongress at the request of members of the Risk and InsuranceManagement Society that broadened the definition of a "qualifiedrisk manager" employed by an insured in order for the insured tohave access to the nonadmitted market.

The NARAB measure would create a National Association ofRegistered Agents and Brokers, facilitating streamlined nonresidentinsurance agent and broker licensing.

The measure preserves state insurance regulation and consumerprotection provisions–but would require agents applying formembership to submit to a criminal background check. Currently only17 states require federal criminal background checks forproducers.

Regarding the surplus lines and reinsurance measure, RichardBouhan, executive director of the National Association ofProfessional Surplus Lines Offices, Ltd., said, "We are pleased tohear the House will be fast tracking H.R. 2571 and hope to see itpass overwhelmingly again this session.

RC Chaffin, eastern region vice president of the AmericanAssociation of Managing General Agents, said the trade group "hasbeen working alongside other industry groups in drafting, providinginformation to legislators and ensuring the positive momentum toget surplus lines reform passed remains a top priority on theHill."

He explained that H.B. 2571 will help modernize "our industry'sability to comply with all appropriate rules and tax reportingrequirements in all 50 states."

Charles Symington, senior vice president of government affairsfor the Independent Insurance Agents and Brokers of America, saidthe IIABA is hopeful that the House can take up these twononcontroversial pieces of legislation by the August district workperiod.

"In particular, the NARAB II legislation introduced by Rep.David Scott, D-Ga., and Rep. Randy Neugebauer, R-Texas, would be astrong step forward in dealing with the problem of overlappingnonresident agent licensing requirements," Mr. Symington said.

Cliff Wilson, president of the National Association of Insuranceand Financial Advisors, said passage of NARAB II would streamlinethe rules for agents doing business in more than one state andtherefore "would significantly improve the agents' ability tocontinue to serve their clients wherever they reside."