On July 9, 2008, the U.S. House Committee on Financial Services, Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises (Subcommittee) approved H.B. 5611, the National Association of Registered Agents and Brokers Reform Act of 2008 (Act).
Dubbed "NARAB II," the Act revives plans to establish a national producer licensing organization. More specifically, the Act calls for the creation of a private, self-regulatory, non-profit entity — the National Association of Registered Agents and Brokers (NARAB) — led by a board comprising six state insurance regulators and five marketplace representatives. NARAB would oversee non-resident producer licensing nationwide, effectively creating a one-stop shop for licensed insurance agents and brokers who wish to sell insurance outside of their resident states. (A detailed summary of the Act can be found at http://www.foley.com/publications/pub_detail.aspx?pubid=4877.)
Introduced in March 2008, the Act has been subsequently revised to ensure that state producer licensing revenue would not be reduced as well as to ensure that state regulators comprise a majority of the NARAB board members. These modifications resolved initial concerns of the National Association of Insurance Commissioners, who have expressed their support for the Act as revised in a July 8, 2008 letter to the Subcommittee.
The Independent Insurance Agents and Brokers of America also have expressed support for the Act, which they believe will modernize non-resident licensing by eliminating the "redundant, costly, and contradictory" regulatory requirements traditionally associated with multistate licensing.
With Subcommittee approval, the bill now heads to the full House Committee on Financial Services — unless committee leadership moves it directly to the House floor.
For further information regarding current producer licensing reciprocity and uniformity issues, see http://www.foley.com/publications/pub_detail.aspx?pubid=5057.
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