The House overwhelmingly approved legislation on Tuesday that brings the U.S. closer to multistate licensing for insurance agents.
The House version of the National Association of Registered Agents and Brokers Reform Act of 2013 (H.R. 1155), also known as NARAB II, passed easily in the House by a vote of 397-6.
A similar bill in the Senate (S. 534) has already advanced through the Senate Banking Committee, with little opposition to its passage.
If enacted into law, NARAB II would set up a “one-stop shop” for insurance agents, allowing them to more easily sell across state lines nationwide.
NARAB II would create a non-profit to act as a clearinghouse where agents and brokers could gain virtual nationwide licensing through a single process. The concept was outlined in the Gramm-Leach Bliley Act of 1999, which sought state reforms to licensing. Several attempts to pass the measure in recent years have failed.
With House passage of the bill, “there is unprecedented momentum to get this bipartisan legislation enacted in to law to secure its promise of an efficient and cost-effective insurance licensing process for financial advisors operating in multiple states,” said Cathy Weatherford, president of the Insured Retirement Institute.
“This is a common-sense bill that will maintain important consumer protections, retain states’ authority to regulate the marketplace, and ultimately remove a barrier that is impeding broker-dealers’ ability and financial advisors’ willingness to sell lifetime income products,” she added.
IRI and other national insurance industry and agent associations have lobbied for passage of the bill.
“NARAB streamlines the multi-state agent licensing process through a regulator controlled board and preserves state enforcement of critical consumer protections,” said Jim Donelon, president of the National Association of Insurance Commissioners (NAIC), and Louisiana’s chief insurance regulator. “We urge the Senate to move swiftly to pass this common sense legislation.”
Rep. Randy Neugebauer (R-Texas), lead sponsor of H.R. 1155, noted that the law would allow agents to expand their business to nearby states.
“The NARAB Reform Act will create a more efficient, modern, and workable system of insurance agent licensing,” Neugebauer said when introducing the legislation, “that allows for more competition between insurance agents and brokers, which ultimately means more choices and better prices for consumers purchasing insurance policies.”
Sept. 13, 2013: Updated to include comments from National Association of Insurance Commissioners.