The House today overwhelmingly passed legislation that wouldprovide a mechanism for establishing true nonresident licensingreciprocity for insurance agents.

The measure was approved by the House by a 397-6vote. It was reported out by the Senate Banking Committeein June and is now awaiting floor action.

Industry officials privately believe that, despite the currentgridlock in Congress, the program, called the National Associationof Registered Agents and Brokers, has a very good chance of beingenacted by this Congress.

NARAB, as envisioned by the legislation, would create anon-profit, independent board that would allow multistate licensingfor insurance producers.

Under HR 1155, the “National Association of Registered Agentsand Brokers Reform Act of 2013,” insurance agents will be ableto apply for NARAB membership and become licensed to sell insurancein multiple states, but states will maintain their full authorityin regulating the business of insurance.

States would retain their regulatory jurisdiction over consumerprotection, market conduct and unfair trade practices, and wouldretain their rights over licensing, supervision, disciplining andthe setting of licensing fees for insurance producers, according toKen Crerar, president and CEO of the Council of Insurance Agentsand Brokers.

The bill was introduced by House Insurance Subcommittee ChairmanRandy Neugebauer, R-Texas, and Rep. David Scott, D-Ga., in Marchwith 42 original cosponsors. The bill currently boasts the supportof 86 bipartisan sponsors.

The bill did not need action by a House committee because it hasalready passed the House in two prior Congresses by voice vote,according to Joel Wood, CIAB senior vice president of governmentaffairs.

The Senate bill is S 534, the National Association of RegisteredAgents and Brokers Reform Act of 2013. It was introduced in theSenate in March by Sen. John Tester, D-Mont., and Sen. MikeJohanns, R-Neb. It has 24 co-sponsors.

“NARAB II is vitally important for tens of thousands of Big 'I'members who operate on a multi-state basis,” said Robert A.Rusbuldt, president and CEO of the Independent InsuranceAgents and Brokers of America.

Charles E. Symington, IIABA senior vice president for externaland government affairs, said, “We hope the Senate will take up thislegislation in the near future and we look forward to working withSenate leadership to move the bill to the Senate floor as soon aspossible.”

Crerar added that, “This bipartisan approach to broker licensingcuts through regulatory red tape, helps consumers and helpsbusinesses operating in multiple jurisdictions. It issupported by every stakeholder group, including the NationalAssociation of Insurance Commissioners, and is on a path to finalpassage.”

Adding the voice of carriers, Jimi Grande, senior vice presidentof federal and political affairs for the National Association ofMutual Insurance Companies said, “By streamlining the licensingprocess for agents and brokers across state lines, this legislationwill increase competition to the benefit of those in themarketplace for coverage, while still maintaining the state'sauthority to regulate the marketplace and protectconsumers.”

MORE INDUSTRY REACTION

The Property Casualty Insurers Association of America says ithas been a strong supporter of NARAB II.

“NARAB II is commonsense legislation and it would create astreamlined agent and broker licensing system that strengthens thecompetitive insurance market while maintaining important consumerprotections. It sets precedent for state-based uniform nationalreform as it allows agents and brokers to more efficiently operateon a multi-state basis,” concludes Nat Wienecke, PCI's senior vicepresident of federal government relations, in astatement.

The National Association of Professional Insurance Agents, whichendorsed NARAB II, says it “favors innovations that streamlineagent and broker licensing, so long as they do nothing to underminethe principle of state-based regulation of insurance.”

Supervisory authority over NARAB II should never be granted tothe Federal Insurance Office. That would constitute both abreach of the statutory prohibition against the FIO acting as aregulator of insurance and an assault on the principle ofstate-based regulation of insurance,” PIA says in a statement.