By Arthur D. Postal
WASHINGTON – The National Association of Insurance Commissioners (NAIC) has submitted to the White House a list of insurance commissioners who are interested in becoming members of the National Association of Registered Agents and Brokers (NARAB) governing board.
The list of 14 names submitted during the NAIC’s spring meeting is being evaluated by the White House, which must nominate a governing board of 13 people, eight of whom come from a regulatory background, according to Joel Wood, senior vice president of government affairs at the Council of Insurance Agents and Brokers (CIAB).
“I’m frequently asked when NARAB will be up and running and issuing licenses,” Wood said. “I think a year from now is probably too ambitious, but I’d be very disappointed if it’s not fully functional by 2017.”
Legislation authorizing the establishment of NARAB was enacted by Congress in January as part of the bill reauthorizing the Terrorism Risk Insurance Act. This action capped a 20-year effort by insurance producers and their trade groups.
The NAIC members who have expressed interest in being on the NARAB board include John D. Doak, Oklahoma; Raymond G. Farmer, South Carolina; Tom Glause, Wyoming; Wayne Goodwin, North Carolina; Adam Hamm, North Dakota; Ralph T. Hudgens, Georgia; John M. Huff, Missouri; Dave Jones, California; Monica J. Lindeen, Montana; Chester A. McPherson, District of Columbia; Al Redmer, Jr., Maryland; Stephen W. Robertson, Indiana; Roger A. Sevigny, New Hampshire, and Lori Wing-Heier, Alaska.
Wood said that the CIAB has made suggestions for board members, as has the NAIC and several other industry associations.
“The Treasury Department is doing a thorough job of vetting potential candidates,” Wood said. “I think we could be only a few weeks away from decisions being made, but I also know that the background checks for presidential appointments are considerable, and that could take months.”
He said the “most encouraging thing” is that Michael McRaith, director of the Federal Insurance Office, “has made it clear that the primary goal is to have a board that is fully committed to making the clearinghouse work effectively.”
Wood said that McRaith and the Obama administration “have to get the right balance of diverse board members, and certainly there are many terrific state regulators and executives that fit the bill.”
According to a briefing paper on the issue prepared by the National Association of Insurance and Financial Advisors, NARAB would be an organization whose specific jurisdiction would be the oversight of insurance producer reciprocal non-resident licensing and continuing education standards on a national – not federal – level.
“For NAIFA members, any producer (individual or agency) licensed in their home state could choose to apply to NARAB and submit to a federal criminal background check,” the briefing paper said.
Members accepted into NARAB members would pay a membership fee as well as all requisite state licensing fees for each state in which they choose to do business. Members would be held to a single non-resident licensing and continuing education standard for each line of authority.
Wood said the next task would be for the NARAB board to develop membership standards for the organization. Those standards, according to the statute, must be based upon the highest standards that currently exist for agent/broker licensure in the states, Wood said.
“But the ‘highest’ standard is not necessarily the most complicated, with every regulatory bell and whistle,” Wood said. “If I had to speculate on what that standard looks like, I’m betting it winds up resembling New York’s licensure requirements. That’s a high standard of professionalism without being excessively complex, and it will clearly include a criminal background check.”
Wood explained that candidates for NARAB membership must be fully licensed in their home jurisdiction, and then they can apply to NARAB.
“Once they meet the standards for membership, they can then use NARAB as the clearinghouse to essentially check off the states where they can receive a nonresident license, and all the state licensing fees will be remitted through NARAB,” Wood said.
“So many of our members have to go down to the police station multiple times a year and get fingerprinted, for example, because of so many separate state requirements,” Wood said. “As NARAB members, they’ll only have to have the criminal background check performed once.”
InsuranceNewsNet Washington Bureau Chief Arthur D. Postal has covered regulatory and legislative issues for more than 30 years. He can be reached at [email protected].
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