Sens. Jon Tester (D-Mont.) and Mike Johanns (R-Neb.) have introduced the National Association of Registered Agents & Brokers Act (NARAB II), which would establish a federal licensing clearinghouse for insurance agents who operate in multiple states.
Currently, agents who serve clients in more than one state must satisfy all licensing requirements in each of the states in which they are licensed. NARAB II would allow producers to be licensed in multiple states by submitting one non-resident application. Once approved by NARAB, the producer would be subject to a uniform set of non-resident licensing requirements.
“NAIFA appreciates the efforts of Senator Tester and Senator Johanns to generate momentum for NARAB II,” said NAIFA President Robert Miller. “The bill would go a long way toward removing some of the regulatory hurdles that make it more difficult for insurance agents to serve the American public.”
The life insurance industry protects the financial interests of 75 million American families and accounts for about 20 percent of all savings in the country.
Yet the burden of meeting varying licensing rules can prove taxing for agents. As it is, it takes NAIFA members an average of 57 hours each year to satisfy licensing and continuing education requirements, according to a recent survey. Having to comply with different requirements in different states inflates the average for multi-state agents and discourages others from growing their businesses.
The situation also harms consumers.
The NAIFA survey found that 80 percent of NAIFA members have had to abandon clients who moved to states where the agents were not licensed. A full 12 percent had lost more than 50 clients under these circumstances.
“NAIFA members work personally with their clients and often get to know them and their families very well,” Mr. Miller added. “There’s no good reason these relationships should have to end just because a client moves to a different state. Inflexible licensing rules disrupt the relationships agents count on to build successful businesses and to best serve their clients. Federal legislation that would retain the successful tradition of state-based insurance regulation and improve consumers’ access to and choice of professional insurance agents can only be a good thing.”
The House of Representatives has twice before passed versions of NARAB II, most recently in March of 2010.