WASHINGTON--Legislation to provide insurance agents with a national license, issued by a federally created board controlled by state regulators and industry representatives, was introduced in the House last night.

The bi-partisan measure, that would replace individual state agent licensing, was sponsored by Rep. David Scott, D-Ga., and Geoff Davis, R-Ky., has nine Democrats and seven Republicans as original co-sponsors.

Fifteen of the 16 co-sponsors are members of the House Financial Services Committee, the panel which is responsible for handling insurance legislation.

The bill also has the strong support of the largest agent organizations in the insurance producer industry, the Independent Insurance Agents and Brokers of America and the National Association of Insurance and Financial Advisors.

Also, the National Association of Mutual Insurance Companies said in a statement it would support the bill.

Qualified support was voiced by the Council of Insurance Agents and Brokers, which originally proposed the National Association of Registered Agents and Brokers (NARAB) measure in 1999.

But the American Insurance Association was highly critical, saying it "would not result in the comprehensive insurance regulatory reform that is needed."

The bill would establish NARAB upon enactment as a private, nonprofit entity managed by a board composed of state insurance regulators and marketplace representatives.

Under the bill, state regulators would continue to supervise and discipline producers and would continue to enforce state consumer protection laws. Membership in NARAB would be voluntary and would not affect the rights of a nonmember producer under any individual state license.

The bill establishes membership criteria, which would include standards for personal qualifications, education, training and experience.

NARAB member applicants would be required to undergo a national criminal background check.

Through NARAB, individual agent members would continue to pay the appropriate fees required by each state in which they are licensed and would renew their NARAB membership biannually.

Under the bill, NARAB would coordinate with the states on establishing a central clearinghouse for license issuance and renewal and collection of regulatory information on producer activities.

Individual state licenses would continue to be issued.

Charles Symington, senior vice president, government affairs, at the IIABA, said the new legislation streamlines nonresident agency licensing while preserving the market conduct rights of state regulators and their ability to oversee agents and brokers.

"Agents and brokers have been burdened for many years with the archaic and inefficient nonresident licensing maze," Mr. Symington said.

"They have been seeking real reform to make the nonresident licensing system more efficient and effective. NARAB II is the answer," he added.

Mr. Symington said that "agents and brokers do not want to get bogged down in larger debates or controversial issues; rather, they need immediate action. This bill provides a common-sense solution for agents and brokers."

Joel Wood, senior vice president, government affairs for the Council of Insurance Agents and Brokers voiced support, saying the CIAB "will work with IIABA and others to ensure that the federal licensure mechanism works and that it folds in to other, more overarching regulatory reform initiatives seamlessly."

Scott Sinder, outside counsel for the CIAB and a partner at Steptoe & Johnson, added that portions of the original NARAB provisions "championed by CIAB" were included in the GLBA legislation passed in 1999.

AIA President Marc Racicot said the NARAB-II bill would not be an arm of the federal government and would not have any day-to-day federal regulatory oversight.

"This raises serious questions about how and if NARAB II would work," Mr. Racicot said. "It has the potential to be more confusing and intrusive than an optional federal charter because the bill displaces the entire state licensing system outside the producer's home state through membership in a private association."

The National Insurance Act, which would establish an optional federal charter, "seeks to preserve the ability of insurers, reinsurers and insurance producers to decide whether or not to opt for national regulatory oversight while not ousting the state regulatory system for those that opt to remain state regulated," Mr. Racicot said.

Peter Ludgin, executive director of Agents for Change, a group formed to support an optional federal charter, said an OFC best accomplishes what the agents are after.

"Agents and brokers want speed to market of products and a uniform licensing process to best serve their customers," Mr. Ludgin said.

"NARAB II may rectify current licensure problems, but it would not address speed to market issues or take into account the benefits of free market pricing," he said.

At the same time, Justin Roth, senior federal affairs director for NAMIC, said that while NAMIC opposes an optional federal charter, "we do support limited congressional action that would help streamline and modernize the current regulatory system."

Mr. Roth added, "This legislation is a good step, as we believe that agent licensing reform is one of those areas that would benefit from federal legislation and would address some of the unnecessary duplicative licensing requirements that currently exist."