NARAB: What's in it for You?

While at the 2015 NAPSLO Mid-Year Leadership Forum in Miami late last month, I had the chance to sit down with Executive Director Brady Kelley—a member of NU's Editorial Advisory Board—and Michael Byrne, a partner specializing in insurance transactional and regulatory work at Drinker Biddle & Reath LLP in New York and a member of NAPSLO's legislative committee.

The conversation centered around NARAB II, and how it will hopefully streamline the processes that govern the way producers do business in multiple states. NAPSLO is working to explain what NARAB will mean for its members, and will be featuring an FAQ on its website,

Since many agents and brokers are somewhat familiar with NARAB, but not some of its finer points, bringing a bit of clarity to the topic might prove useful.

So what exactly is NARAB?

The National Association of Registered Agents and Brokers will exist as a new regulatory agency formed in the District of Columbia as a nonprofit association. A board of directors composed of eight U.S. state insurance commissioners and five industry representatives will govern it.

The law specifies that its board of directors shall be appointed by the president within 90 days of its enactment. You’d have to be California dreaming to think this will actually happen within three months, but one assumes they had to at least establish a deadline before they could break it.

NARAB will license agents and brokers who wish to obtain approval to do business outside their “home states.” An individual or entity licensed in their home state can obtain licensing in all 50 states by becoming a “member” of NARAB.

Long supported by the National Association of Insurance Commissioners, NARAB solves the longstanding burden of complying with licensing requirements that vary state by state while still maintaining critical consumer protections within one's local, state-based regulatory system.

Who can become a member? Any insurance producer already licensed in his or her home state who satisfies membership criteria, which the as-yet-unnamed NARAB board of directors will establish.

The goal here is to create a user-friendly, national clearinghouse through which licensing, continuing education and other nonresident qualification conditions will be applied on a multistate basis. In theory, it will provide a single point of filing for eligible insurance producers and enable a much more efficient process for obtaining a multistate producer license than what currently exists.

The NAIC will provide the president with recommendations for the eight state insurance commissioner positions.

Kelley and Byrne agreed that, taking into consideration the size and scope of such an initiative, the implementation of NARAB within two years would be a victory. One hurdle is going to be funding: The NARAB board of directors will establish and collect membership fees to cover the costs of its operations, but an organization must first have members in order to have dues. It is assumed that the industry trade associations that have lobbied so hard for its passage will be the ones to lend assistance as NARAB gets off the ground.

Here's hoping that once it does, NARAB will deliver on its promise. Stay tuned to for more news on this topic.

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