Legislation that would create a long-proposed The National Association of Registered Agents and Brokers (NARAB II) Reform Act of 2013 would create a non-profit membership organization to facilitate the licensing of insurance agents and brokers to work outside of their home states. The bill was introduced by Sen. Jon Tester, D-Mont., and Sen. Mike Johanns, R-Neb.
Agents and brokers have argued that the clearinghouse would increase consumer choices and lower insurance rates. Under the bill, NARAB members would need to meet professional and consumer protection guidelines set by the association's board of directors, composed of state insurance regulators and experts with experience and expertise in insurance producer licensing.
The concept of NARAB was first included in Gramm-Leach-Bliley financial reform legislation in 1999, but it was never instituted because a majority of states were deemed to have reached reciprocity. However, in practice, the results did not achieve the goals of reciprocity and uniformity set in the legislation, thus the need for this legislation, according to a statement released by Tester and Johanns.
"This bill is a win for consumers. Increasing competition and lowering compliance costs gives families additional and affordable options when shopping for insurance policies that best meet their needs," Johanns said. "This bill also helps streamline licensing requirements for local insurance agents while maintaining the safeguards offered through state-regulated insurance markets. I'm glad the committee advanced our legislation and I look forward to it being taken up by the full Senate."
The agent and broker community has pushed Congress to pass NARAB II legislation for years, arguing that having to apply for separate licenses in each state where a producer does business is costly and carries administrative burdens.
Robert Rusbuldt, president and chief executive officer of the Independent Insurance Agents and Brokers of America, praised the committee's passage of the legislation . "NARAB II is vitally important for tens of thousands of Big I members who operate on a multi-state basis," Rusbuldt said in a statement. "We would like to particularly thank Sens. Tester and Johanns and their incredible staff for their tireless work on this important legislation that will ease consumer access to insurance markets while also leaving important consumer protections in the capable hands of state insurance regulators."
The NARAB II bill will now head to the full Senate. The House of Representatives is working on a separate NARAB II bill that also has bipartisan support. Rep. Jeb Hensarling, R-Texas, who chairs the House Financial Services Committee, has argued in favor of passing NARAB II legislation