Independent Insurance Agents and Brokers of America (IIABA) is trying to enlist the Treasury Department to support targeted legislation that would create true agent-licensing reciprocity across the country.
The IIABA made its views known in a letter to the Federal Insurance Office (FIO). The missive makes clear that the IIABA does not support overall federal regulation of insurance.
It does say, though, that the FIO should support legislation that would create the National Association of Registered Agents and Brokers (NARAB). The legislation has been around for more than a decade and was introduced in the House last year as H.R. 1112.
The IIABA letter says, “Obtaining and maintaining the necessary licenses is often a costly, burdensome and time-consuming endeavor, and the need to focus on these administrative matters hinders the ability of insurance agents and brokers to effectively address the needs of consumers.”
The letter says that NARAB’s “simple and limited mission would be to serve as a portal or central clearinghouse for insurance producers who seek the regulatory authority to operate in multiple states.”
The letter says the bill “discretely utilizes targeted congressional action to produce efficiencies and is deferential to states’ rights at the same time.”
It adds that the legislation merely addresses marketplace entry and appropriately leaves regulatory authority in the hands of state officials: “The proposal does nothing to limit or restrict the ability of state regulators to enforce state-marketplace and consumer-protection laws.”
The problems with producer licensing today, according to the IIABA, “may seem small and nitpicky at first blush,” but their cumulative effects are extensive because of the significant number of individuals employed as insurance producers and the number of licenses that are issued every year.
The letter says that data provided by the National Insurance Producer Registry in September 2009 shows that nearly 2.3 million individuals are licensed as insurance producers in at least one jurisdiction, and they collectively hold more than 6.2 million separate insurance licenses.
Approximately 232,000 individuals—or more than 10 percent of the universe of individual producers—are licensed in five or more jurisdictions, according to the IIABA.