A hearing by the Senate Banking Subcommittee on Securities, Insurance and Investment on March 19, 2013 kicked into gear legislation that would allow insurance producers to more easily obtain licensure to sell, solicit or negotiate insurance in multiple states. The National Association of Registered Agents & Brokers Reform Act of 2013 (the “Act”), introduced on March 12, 2013 as S. 534, is a reintroduction of the previous session’s S. 2342. Additionally, the House of Representatives has put forward its own version, H.R. 1155, which is a reintroduction of the previous session’s H.R. 1112.
The Act would establish the National Association of Registered Agents and Brokers (“NARAB”), a nonprofit corporation to license nonresident producers. Producers who are already licensed in one state could join NARAB and become licensed in all other states. Under the current process, a producer must apply for licensure in each state separately. Proponents of the Act believe NARAB will ease the administrative burden of filing applications in multiple jurisdictions.
Conversely, some consumer advocates who oppose the proposed bills do not believe a self-regulatory nonprofit organization should carry out such an important government function. Consumer advocates also argue the proposed 13-member NARAB board of directors is flawed as it contains eight regulators, five insurance industry representatives, and no consumer advocates.