Washington – A new legislative initiative has opened a new front in the battle to nationalize insurance regulation. H.R. 5611, officially the National Association of Registered Agents and Brokers Reform Act of 2008, but commonly referred to as NARAB II, was greeted last week with both praise and condemnation.
The bill would nationalize insurance agent licensing only, leading critics to charge that the legislation’s true intent is to undercut support for existing efforts to establish an optional federal charter for insurers.
“A better, and more complete approach to reforming insurance regulation would be to adopt the 'National Insurance Act,' legislation—S. 40 and H.R. 3200—already pending in Congress,” says Marc Racicot, president of the
Proponents of NARAB view the bill as the overdue successor to the Gramm-Leach-Bliley Act (GLBA), and say it would streamline non-resident insurance agent and broker licensing while preserving the market conduct rights of states and their ability to supervise agents and brokers.
“The current state regulatory system has worked effectively to ensure insurer solvency and protect both individual consumers and businesses,” says Robert Fulwider, chairman of the
Racicot questions the legislation’s plan to establish a District of Columbia-chartered nonprofit corporation called the National Association of Registered Agents and Brokers, noting that the entity would not be an arm of the federal government and would’nt have any day-to-day federal regulatory oversight.
"It has the potential to be more confusing and intrusive than an optional federal charter because the bill displaces the entire state licensing system outside the producer's home state through membership in a private association," Racicot says. "This raises serious questions about how and if NARAB II would work. We continue to advocate for a holistic approach as embodied in the National Insurance Act, which provides for a single, uniform regulatory system for those that choose the federal option."
While it’s tempting to view the back and forth over NARAB as merely a proxy war over federal charter legislation, the issue of agency licensing is garnering consideration in its own right. In February, the
The peer assessment was conducted by a group of volunteer regulators who traveled to 52 member jurisdictions over a period of three months. Commissioners, directors, superintendents, senior regulatory staff and licensing directors were actively engaged in the assessment process.
“This self-assessment outlines where we stand today in terms of compliance with the Gramm-Leach-Bliley Act’s reciprocity requirements and uniform resident licensing standards,” says NAIC President-Elect and New Hampshire Insurance Commissioner Roger Sevigny, who also serves as chair of the NAIC/Industry Producer Licensing Coalition. “It also provides an independent legal review and on-site peer assessment of our licensing laws, regu tions, practices and processes.”
At the request of the NAIC’s Executive Committee, the report includes findings of continued compliance with the NAIC’s 2002 reciprocity standard; a measurement of states’ compliance with the NAIC’s uniform resident licensing standards, along with a focus on areas of low compliance and document-related barriers to full implementation; as well as an assessment of concerns submitted by national producer trade organizations.
Sources: Big I, AIA, NAIC
Exclusive content available only on InsuranceNetworking.com
