WASHINGTON–A top property-casualty insurance agents' trade group is criticizing a decision by a large industry organization representing life insurance agents to recommend qualified support for legislation creating an optional federal charter for life insurers.

The verbal shot directed at the board of trustees of the National Association of Insurance and Financial Advisors (NAIFA) came today from Charles Symington, senior vice president, government affairs for the Independent Insurance Agents and Brokers of America.

“The NAIFA decision to move from neutrality to conditional support of optional federal regulation doesn't come as a surprise to many in Washington D.C.; however, it is likely to be questioned by many life agents, particularly those agents who represent more than one insurance company,” said Mr. Symington.

He was commenting on the Friday NAIFA board decision to recommend that its members support an OFC. Many of those members cross-sell and offer property-casualty as well as life coverage. NAIFA is now the fourth largest life group to endorse OFC.

The IIABA and NAIFA have been working together on legislation that would recreate the National Association of Registered Agents and Brokers.

The legislation introduced last month–H.R. 5611, the NARAB Reform Act of 2008–would create a national agent license. Its provisions would create a streamlined nonresident licensing for agents.

Jeffrey Taggart, president of NAIFA, confirmed that between 30 percent and 40 percent of NAIFA members either sell property-casualty insurance as general agents or are employees of general agencies or captive agencies which also sell p-c products–for example, State Farm and Nationwide.

But he did point to the NAIFA letter to its members suggesting they support an OFC.

He added that the policy would be presented to the members of NAIFA at the trade group's annual meeting in September in San Diego.

He said all constituent groups of NAIFA, including state and local associations, are being consulted on this issue.

Mr. Taggart noted that the letter said NAIFA would continue to support the legislation creating NARAB-II, the shorthand term for H.R. 5611.

The letter explained that the Policy Formation Subcommittee of the NAIFA Trustees had recommended that the organization “continue to support the principles underlying state regulation of the business of insurance and efforts to improve the state-based system of insurance regulation, and amend the current NAIFA policy on insurance regulatory reform to include support of the OFC concept provided that several conditions are met.”

Specifically, the trustees said in the letter, the qualifications are that, “should the National Insurance Act become law, we want our members to have the option to remain licensed and regulated at the state level.”

“We believe any modernization proposals should promote consumer protection, streamline agent licensing, improve product speed to market, and improve the competitiveness of the insurance industry,” the board added.

The qualification the trustees added is that NAIFA will work to ensure any final legislation include a provision giving its members the option to remain licensed and regulated at the state level, according to a letter to its leadership that the trustees released today.

The trustees acted after being given assurances by representatives of several large insurance companies in meetings that if a major life insurer elects to become federally chartered, it will not insist that all of its agents and brokers also become federally chartered, according to an official of a life insurance company involved in the talks who asked not to be named.

The NAIFA decision means that all major life insurance industry trade groups are backing such legislation. Specifically, these include the American Council of Life Insurers, the Association for Advanced Life Underwriting and National Association of Independent Life Brokerage Agents.

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