Legislation providing a mechanism for establishing truenonresident licensing reciprocity was reported out of theSenate Banking Committee.

The legislation is S. 534, the National Association ofRegistered Agents and Brokers Reform Act of 2013. It was introducedin the Senate in March by Sen. John Tester, D-Mont., and Sen. MikeJohanns, R-Neb. It has 22 co-sponsors.

“This concept was first developed by Congress in 1999 when itpassed Gramm-Leach-Bliley but unfortunately, wasn't able to achievethe level of reciprocity and uniformity hoped for,” Tester said inasking the committee to support the measure. “The product beforeyou today (June 6) represents over a decade worth of effort and Ibelieve, will finally achieve the goals laid out in GLB in a waythat ensures that regulators can continue to protect consumers,”Tester said.

Robert A. Rusbuldt, president & CEO of the IndependentInsurance Agents and Brokers of America, says, “NARAB II is vitallyimportant for tens of thousands of Big I members who operate on amulti-state basis.”

He says the legislation “will ease consumer access to insurancemarkets while also leaving important consumer protections in thecapable hands of state insurance regulators.”

Rusbuldt said the legislation is important because creation ofNARAB II would build upon regulatory experience at the state level,promote consistency in agent and agency licensing and improvemarketplace responsiveness.

Companion legislation, H.R. 1155, has been introduced in theHouse by Rep. Randy Neugebauer, R-Tex., and Rep. David Scott,D-Ga.

The bill has passed the House in two prior Congresses, and hasstrong support in that body—increasing the likelihood the bill willbe enacted this year despite the fact that Congress is deeplydivided.

Sen. Elizabeth Warren, D-Mass., was able to win support for anamendment to the bill that will allow President Obama to appointfive other members of the board, with the stipulation that they“shall have demonstrated expertise and experience with property andcasualty and life and health insurance producer licensing.”

The issue of state regulatory supremacy also came up in anamendment proposed by Sen. Tom Coburn, R-Okla, that would allowstates to “opt-out” of NARAB II if the state felt its authority wasgoing to be limited through creation of NARAB. However, theamendment was rejected by the panel.

The bill will establish the National Association of RegisteredAgents and Brokers, a non-profit, independent board to provide amechanism for multistate licensing for insurance producers.

Under the bill, insurance agents will be able to apply for NARABmembership and become licensed to sell insurance in multiplestates, but states will maintain their full authority in regulatingthe business of insurance.

“This will reduce costs and red tape for insurance agents andbrokers who operate in multiple states, and will allow consumers tomaintain relationships with their insurance agents if they relocateto another state,” said Sen. Tim Johnson, D-S.D., in praisingcommittee action on the legislation.