Big ‘I’ Continues Campaign for NARAB II

As the 113th Congress revs up and the association prepares for the annual Big “I” Legislative Conference in mid-April, excitement continues to mount for a critical piece of legislation: the “National Association of Registered Agents & Brokers Reform Act,” or NARAB II.

The bill was introduced in both the Senate (S. 534) and House (H.R. 1064) on March 12.

NARAB II would provide non-resident insurance agent and broker licensing reform (applied to areas beyond an agent’s home state), while preserving the rights of states to supervise and discipline agents and brokers.

The bipartisan bill was once again introduced by House Insurance Subcommittee Chairman Randy Neugebauer (R-Texas) and Rep. David Scott (D-Ga.) in the House; and by Senate Insurance Subcommittee Chairman Jon Tester (D-Mont.) and Ranking Member Mike Johanns (R-Neb.) in the Senate. The Big “I” is proud that the Insurance Subcommittee chairs in both the House and the Senate are the lead sponsors of this legislation to benefit so many of America’s Main Street businesses.

The Big “I” has long been concerned that as insurance producers operate and obtain licenses in more jurisdictions than ever, the lack of true reciprocity makes compliance challenging, costly and presents additional burdens that are ultimately detrimental to insurance consumers.

Once signed into law, NARAB II would immediately be established as a private, nonprofit entity managed by a board composed of a majority of state insurance regulators, as well as marketplace representatives. The reforms would only apply to marketplace entry and day-to-day state insurance laws and regulations would not be affected.

The legislation would also permit producers in good standing in their home state to operate in additional states if they satisfy NARAB membership criteria. Producers could remain licensed in the traditional manner, but those operating in multiple jurisdictions could apply for NARAB membership. For producers operating in multiple states, and those who would like to expand their operations, NARAB would effectively create one-stop producer licensing for additional licenses beyond the home state. Agencies could also choose to utilize this new mechanism to streamline their business entity licensing.

NARAB II would be greatly beneficial to insurance consumers in numerous ways, by:

• Easing their access to qualified insurance advisors;
• Providing higher and more consistent national consumer protection standards through establishing membership requirements; and
• Coordinating with the states to establish a central clearinghouse for license issuance and renewal and collection of regulatory information on producer activities.

NARAB II is also deferential to states’ rights. NARAB would not have any federal regulatory power and states would continue to regulate market conduct, consumer protection and other critical functions. Through NARAB, individuals and agencies would continue to pay the appropriate fees required by each state in which they are licensed, thereby not affecting state revenue.

The Big “I” strongly supports this common-sense reform of agent licensing to reduce the administrative burdens faced by its small business members and their employees. The legislation has passed the House of Representatives by a voice vote in two previous Congresses. The legislation has been endorsed by the National Association of Insurance Commissioners and enjoys the strong support of nearly every major insurance industry trade association represented in Washington, D.C.

The association is optimistic that the 113th Congress will soon move on this critical piece of legislation.

Margarita Tapia is Big “I” director of public affairs.