NAIFA Welcomes Introduction of Interstate Insurance Agent Licensing Bill
“NARAB II” Bill Designed to Alleviate Agent Licensing Headaches
Contact:
Lee Allen, Vice President of Communications and Marketing, NAIFA
(703) 770-8112 (office)
(703) 336-2462 (mobile)
FALLS CHURCH, VA ― March 13, 2008 ―The National Association of Insurance and Financial Advisors (NAIFA) supports new legislation that aims to modernize the current system of insurance agent licensing as it applies to those who are registered in multiple states. Representatives David Scott (D-GA) and Geoff Davis (R-KY) today introduced H.R. 5611 or the National Association of Registered Agents & Brokers Reform Act, the so-called “NARAB II” bill. Representatives Scott and Davis were joined in their support by several of their Democrat and Republican colleagues who serve on the House Financial Services Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises. If enacted, the legislation would establish the National Association of Registered Agents and Brokers (NARAB), a non-profit organization that would oversee licensing standards and interstate reciprocity on a national scale.
The bill does not reduce the standards for agents to be licensed; rather it allows producers who are licensed and operate in multiple states to comply with a single set of licensing and continuing education rules. The NARAB standards would be determined by a board made up of insurance commissioners, producers and insurance companies. The concept of NARAB was originally included in the 1999 Gramm-Leach-Bliley Act (GLBA).
The original NARAB would have established a licensure clearinghouse if a majority of the states did not enact reciprocity legislation within three years after the enactment of GLBA. Because the states determined that the threshold was satisfied, the clearinghouse was never established. However, agents and agencies continue to face inefficiencies and obstacles in obtaining non-resident state licenses and the intent of H.R. 5611 is to move forward and actually establish NARAB to address these issues. Through the NARAB II legislation, insurance agents would be able to apply for membership in NARAB and subsequently obtain a license in states other than their home state by paying the required state licensure fees. Non-home states would be prohibited from imposing additional requirements or qualifications on NARAB member to do business.
Insurance regulatory reform is a top priority for NAIFA and NARAB II is a positive step in that direction. NAIFA is also currently evaluating its position on comprehensive reform legislation such as the National Insurance Act often referred to as the Optional Federal Charter (OFC).
“Our support of NARAB II should not be interpreted as an early indicator that NAIFA plans to either oppose or support OFC legislation,” explains Jeffrey J. Taggart, CLU, ChFC, LUTCF, President of NAIFA. “NAIFA is currently undergoing an exhaustive, thorough review of what the OFC could mean for advisors and agents, and we remain open to all legislative proposals that could benefit our members and ultimately the consumers they serve.”
NAIFA is undertaking an information and education campaign to help NAIFA member investors to better understand the implications and impact of the Optional Federal Charter and how it could improve consumer protection and foster greater uniformity in all areas of insurance regulation, including producer licensing.
“We thank Congressmen Scott and Davis for their leadership and bipartisan support of this important legislation” says John Healy, CAE, NAIFA’s CEO. “It is clear from multiple Congressional hearings that various aspects of insurance regulation are outdated and need be brought into the 21st century. NAIFA is pleased to work with key Congressional leaders to bring much needed reform to producer licensing.”
This legislation is also supported by the Independent Insurance Agents & Brokers of America.
To learn more about NAIFA’s positions on all regulatory reform efforts, please visit the Insurance Regulatory Reform and Modernization section of NAIFA’s website at www.naifa.org/advocacy/irr.
About NAIFA: Founded in 1890 as the National Association of Life Underwriters, the National Association of Insurance and Financial Advisors comprises nearly 800 state and local associations representing the business interests of 60,000 members nationwide. Members focus their practices on one or more of the following: life insurance and annuities, health insurance and employee benefits, multiline, and financial advising and investments. NAIFA’s mission is to advocate for a positive legislative and regulatory environment, enhance business and professional skills, and promote the ethical conduct of its members. Visit NAIFA’s website at www.naifa.org.