The Big “I” has secured a full exemption for independent agents and brokers from onerous requirements in the National Defense Authorization Act and will advocate that the exemption is included going forward.
This week, the U.S. House of Representatives appointed conferees to the National Defense Authorization Act (NDAA). The House conferees met with their U.S. Senate counterparts for the first time this week.
Earlier this year, the House passed the FY21 NDAA which included an amendment that would create a burdensome new federal reporting requirement for many small businesses. However, the Big “I" was successful in securing a full exemption for independent insurance agents and brokers in this House-passed legislation and will now advocate that this exemption is included in any House-Senate compromise as Congress moves to pass a final NDAA bill.
The amendment was introduced by Rep. Carolyn Maloney (D-New York) and is similar to legislation that previously passed the House—in which the Big “I" also secured an exemption for independent insurance agents and brokers.
The amendment to the NDAA would require nearly every small business with fewer than 20 employees to file new reports on their beneficial ownership with the U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN). All businesses would have to comply with the new requirement annually starting within two years of the law's enactment for existing businesses or upon the incorporation of a new business.
FinCEN would require the disclosure of any individual who “receives substantial economic benefits from the assets" of a business. The legislation defers to regulators at the Treasury to define “substantial economic benefits." The penalties for failure to comply with these reporting requirements are quite severe with civil penalties of up to $10,000 and criminal penalties of up to three years in prison.
Throughout the legislative process, the Big “I" was the only producer group that advocated on behalf of agents and brokers in an attempt to exclude them from this new onerous requirement. The Big “I" is now actively advocating to make sure that this exemption stays in the NDAA legislation as the House and Senate negotiate a final version of the NDAA that could be taken up in December.
Wyatt Stewart is Big “I" assistant vice president of federal government affairs.