The Senate is set to act next on proposed law that would streamline insurance licensing for the benefit of agents and consumers.
The National Association of Insurance and Financial Advisors applauds the House of Representatives for passing H.R. 1155, the National Association of Registered Agents and Brokers Reform Act of 2013 (NARAB II).
The bill, sponsored by Reps. Randy Neugebauer (R-Texas) and David Scott (D-Georgia), would make it easier for agents and brokers to conduct business in multiple states while preserving state regulation of insurance. NAIFA and a number of its industry coalition partners sent a letter last week to every member of the House of Representatives urging passage of NARAB II.
“NAIFA would like to thank Representatives Neugebauer and Scott for their efforts to shepherd this important legislation through the House,” said NAIFA President Rob Smith. “Nearly 80 percent of NAIFA members have lost clients who moved to states in which they were not licensed, and 12 percent report that they have lost more than 50 clients this way. NARAB II would offer a common-sense solution to this problem.”
Currently, agents and brokers must be licensed in each state in which they do business. NARAB II would create a national – not federal – clearinghouse for insurance agents and brokers to obtain approval to operate on a multi-state basis. NARAB would be governed by a Board of Directors dominated by state regulators and would establish standards for membership that meet or exceed the existing requirements in any state.
A prospective NARAB member would be required to be fully licensed in his or her home state and satisfy rigorous membership criteria for the national organization. An approved NARAB member could utilize the clearinghouse to obtain approval to operate in any other state.
“Passage of NARAB II would be a huge win for consumers,” added NAIFA President Smith. “Insurance advisors often have relationships with clients going back years or even decades. This legislation would make it easier for insurance professionals to maintain these relationships even if they or the clients move to different states. While NARAB II keeps all of the state-based regulations in place to protect consumers, it would reduce unnecessary costs and burdens associated with being licensed in multiple states.”
A Senate version of NARAB II (S.534) is currently under consideration. It has bipartisan support, and NAIFA strongly urges its passage.