Producers Hail NARAB Passage By House

In a bid to make it easier for producers to do business across state lines, the U.S. House of Representatives last week passed the National Association of Registered Agents and Brokers Reform Act on a voice vote.

There is no companion legislation yet introduced in the Senate.

H.R. 2554 is an amendment to 1999′s Gramm-Leach-Bliley Act, which included a NARAB provision–but one which kept the agency dormant unless a majority of states failed to adopt uniformity in licensing.

This new bill establishes NARAB as a national, nonprofit corporation to allow for agent licensing standardization across state lines. Through NARAB, one set of licensing, continuing education and other insurance producer qualification standards can be adopted and applied. Producers would be allowed to conduct business in any state, in any line of insurance they are permitted to in their home state.

States retain regulatory jurisdiction over consumer protection, market conduct and unfair trade practices. They also retain their rights over licensing, supervision, disciplining and setting of licensing fees for insurance producers.

"Although the state insurance regulatory system has worked effectively to ensure insurer solvency and look after policyholders, the system does need improvement in the area of agent licensing," Robert Rusbuldt, chief executive officer of the Independent Insurance Agents and Brokers of America, said in a statement.

"H.R. 2554 would reform and improve the current system of insurance regulation by providing one-stop, nonresident licensing reciprocity," he added.

Joel Wood, senior vice president for government affairs for the Council of Insurance Agents and Brokers–which pioneered the NARAB concept long before it became part of the initial GLB Act–said his group was very happy the bill had reached the floor after a long fight for agent licensing reciprocity.

Marliss McManus, senior federal affairs director for the National Association of Mutual Insurance Companies, said the bill "provides common sense reforms that level the playing field between states for agents, allowing licensed agents to offer their services across all jurisdictions without impeding on the regulatory rights of the states themselves."

"As Congress continues to study and debate the future of regulatory reform of the property and casualty industry, this approach would streamline the current regulatory system and establish uniform and consistent standards, while leaving the day-to-day regulatory control at the state level," said Mr. McManus.