While at the 2015 NAPSLO Mid-Year LeadershipForum in Miami late last month, I had the chance to sit down withExecutive Director Brady Kelley—a member of NU's Editorial AdvisoryBoard—and Michael Byrne, a partner specializing in insurancetransactional and regulatory work at Drinker Biddle & Reath LLPin New York and a member of NAPSLO's legislative committee.

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The conversation centered around NARAB II, and how it willhopefully streamline the processes that govern the way producers dobusiness in multiple states. NAPSLO is working to explain whatNARAB will mean for its members, and will be featuring an FAQ onits website, NAPSLO.org.

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Since many agents and brokers are somewhat familiar with NARAB,but not some of its finer points, bringing a bit of clarity to thetopic might prove useful.

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So what exactly is NARAB?

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The National Association of Registered Agents and Brokers willexist as a new regulatory agency formed in the District of Columbiaas a nonprofit association. A board of directors composed of eightU.S. state insurance commissioners and five industryrepresentatives will govern it.

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The law specifies that its board of directors shall be appointedby the president within 90 days of its enactment. You'd have to beCalifornia dreaming to think this will actually happen within threemonths, but one assumes they had to at least establish adeadline before they could break it.

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NARAB will license agents and brokers who wish to obtainapproval to do business outside their “home states.” An individualor entity licensed in their home state can obtain licensing in all50 states by becoming a “member” of NARAB.

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Long supported by the National Association of InsuranceCommissioners, NARAB solves the longstanding burden of complyingwith licensing requirements that vary state by state while stillmaintaining critical consumer protections within one's local,state-based regulatory system.

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Who can become a member? Any insurance producer already licensedin his or her home state who satisfies membership criteria, whichthe as-yet-unnamed NARAB board of directors will establish.

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The goal here is to create a user-friendly, nationalclearinghouse through which licensing, continuing education andother nonresident qualification conditions will be applied on amultistate basis. In theory, it will provide a single point offiling for eligible insurance producers and enable a much moreefficient process for obtaining a multistate producer license thanwhat currently exists.

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The NAIC will provide the president with recommendations for theeight state insurance commissioner positions.

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Kelley and Byrne agreed that, taking into consideration the sizeand scope of such an initiative, the implementation of NARAB withintwo years would be a victory. One hurdle is going to be funding:The NARAB board of directors will establish and collect membershipfees to cover the costs of its operations, but an organization mustfirst have members in order to have dues. It is assumed that theindustry trade associations that have lobbied so hard for itspassage will be the ones to lend assistance as NARAB gets off theground.

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Here's hoping that once it does, NARAB will deliver on itspromise. Stay tuned to propertycasualty360.com for more news onthis topic.

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Shawn Moynihan

Shawn Moynihan is Editor-in-Chief of National Underwriter Property & Casualty. A St. John’s University alum, Moynihan has earned 11 Jesse H. Neal Awards, the Pulitzers of the business press; seven Azbee Awards, from the American Society of Business Press Editors; two Folio Awards; and a SABEW award, from the Society of American Business Editors & Writers. Prior to joining ALM, he served as Managing Editor/Online Editor of journalism institution Editor & Publisher, the trade bible of the newspaper industry. Moynihan also has held editorial positions with AOL, Metro New York, and Newhouse Newspapers. He can be reached at [email protected].