Approval came last night on a voice vote for the bill, commonly known as NARAB II (H.R. 2554). The measure is an amendment to the Gramm-Leach-Bliley Act to reestablish the national registration of insurance agents as a nonprofit corporation to allow for agent reciprocity across state lines.
The bill now moves to the Senate where it faces an uncertain future.
Agents and brokers, under the bill, would be allowed to conduct business in any state in any line of insurance they are permitted to in their home state.
States will retain regulatory jurisdiction over consumer protection, market conduct and unfair trade practices. They also retain their rights over licensing, supervision, disciplining and setting of licensing fees for insurance producers.
In a statement, the Independent Insurance Agents & Brokers of America’s Chief Executive Officer Robert Rusbuldt said that while state insurance regulation has worked effectively, improvements are needed.
Charles Symington, IIABA senior vice president of government affairs said the legislation improves licensing while ensuring state authority over insurance remains intact. It would also promote consistency and preserve marketplace responsiveness.
Joel Wood, senior vice president for Government Affairs for the Washington, D.C.-based Council of Insurance Agents & Brokers said the association was very happy the bill had reached the floor after a long fight for agent reciprocity.
On the House floor Rep. David Scott, D-Ga., said the bill received widespread support from many sectors of the insurance community and would not create federal oversight of insurance producers.
The National Association of Mutual Insurance Companies commended the House action. The bill “provides common sense reforms that level the playing field between states for agents, allowing licensed agents to offer their services across all jurisdictions without impeding on the regulatory rights of the states themselves,” said Marliss McManus, senior federal affairs director for NAMIC.
“This common sense reform will help ensure that customers have a vibrant, competitive marketplace as they shop for insurance coverage,” she added.
NAMIC noted that by establishing the National Association of Registered Agents and Brokers one set of licensing, continuing education, and other insurance producer qualification standards could be adopted and applied on a multi-state basis.