Agent groups fought a war of words in dueling op-ed pieces in a Capitol Hill newspaper over the last several weeks, crossing lobbying swords over calls for an optional federal charter.

In its piece, officials of the Independent Insurance Agents and Brokers of America acknowledged that “serious, significant reform” of insurance regulation is needed, and suggested resurrecting an idea to create a national self-regulatory organization to oversee producer licensing.

However, a splinter agent group formed to support an optional federal charter dismissed the IIABA’s proposal for reform as a mere “band-aid.”

In a Sept. 20 op-ed piece in The Hill, a thrice-weekly tabloid published on Capitol Hill, IIABA CEO Robert Rusbuldt proposed a three-step reform plan calling for “vigorous, but targeted” reform and modernization of the current state regulatory system.

The keystone of the IIABA proposal is a new “NARAB” (National Association of Registered Agents and Brokers), an entity established as a fallback in the 1999 Gramm-Leach-Bliley law, which would have regulated producer licensing had not a majority of states established uniformity in their own producer registration rules.

NARAB was originally proposed as a stand-alone vehicle by the Council of Insurance Agents and Brokers, before being grafted onto the GLB legislation.

In a response on Oct. 11, Peter Ludgin, executive director of Agents for Change, wrote in that he “applauds” Mr. Rusbuldt’s proposal, adding that “ideas matter.”

However, Mr. Ludgin said, “NARAB-II is a band-aid solution. Today, some of the largest markets are not fully participating in NARAB, many states are not truly reciprocal, and it has done little to fix agency licensing problems.”

Under the NARAB-II proposed by Mr. Rusbuldt, a new, private, nonprofit entity responsible for agent/broker licensing would be created through federal law. It would be managed by a board that included state insurance regulators and industry representatives, including an independent agent.

In his op-ed piece, Mr. Rusbuldt said such an entity “would give agents and brokers a choice between the current state-by-state licensing system and a national licensing portal (as long as that producer is duly licensed in a state).”

“Agents and brokers comfortable with the current system and those licensed in one or a couple of states could choose to remain licensed in the traditional manner with no outside interference,” Mr. Rusbuldt suggested.

“Producers operating in multiple jurisdictions unhappy with the current licensing burdens, however, could opt for NARAB and the ease of national licensing through a Self-Regulatory Organization-type entity separate and apart from the federal government,” he said.

For producers already licensed in a state, NARAB would effectively create one-stop producer licensing for additional nonresident licenses, Mr. Rusbuldt argued.

“It would preempt state laws regulating nonresident insurance producer licensing if they discriminate against NARAB agents based on nonresidency, or if they impose additional licensing requirements on nonresident NARAB agents beyond those established by the NARAB board,” he said. “This would be a significant reform for all agents who have nonresident licenses, and it can be accomplished without a federal regulator.”

Mr. Rusbuldt’s proposal also calls for significant reforms to be made to the product approval process for life and property-casualty insurance forms, and suggests that additional “federal tools”–such as the federal surplus lines legislation that recently passed the House–could be adopted. All of these would forestall the need for an optional federal charter, Mr. Rusbuldt contended.

Mr. Ludgin disagreed. “Agents For Change believes in open markets, choice and competition,” he said. “Any change must result in the best possible outcome for our customers. An OFC is the right fix.”

“We live in a global marketplace,” Mr. Ludgin added. “Shouldn’t consumers be able to take advantage of competitive market forces in choosing their insurance, the same way they do in choosing their bank or credit card?

He added that “an OFC will promote competition. It may lower prices. And it will be a boon to consumers. An OFC is the right policy prescription for the 21st century.”