SAN DIEGO – Whatever happened to NARAB II? That’s the legislation which would create the National Association of Registered Agents and Brokers, an organization that would streamline reciprocal non-resident licensing for insurance producers.
It seemed like a probable “go” in July, but the measure still has not been enacted by Congress, said Jill Hoffman, assistant vice president-federal government relations for the National Associations of Insurance and Financial Advisors (NAIFA). She spoke with InsuranceNewsNet about status of the legislation in advance of her report here at NAIFA’s 125th annual meeting
Agent organizations, including major supporter NAIFA, have backed the measure for several years, she said. The legislation also has the support of the National Association of Insurance Commissioners (NAIC) and the Federal Insurance Office (FIO).
In addition, by July, both houses of Congress had passed similar versions of the bill.
Yet still no action. Now, there is “little time left” to get enactment this year, Hoffman cautioned. That’s because Congress goes on its next recess in September and then the legislators move into the fall election season followed by a lame duck session.
“We are so close,” she said. “We’re on the one-yard line. We have the support.”
For that reason, NAIFA is urging producers to contact their congressional representatives about enacting the legislation this year.
Status of the bill
The House passed a stand-alone version of NARAB II (H.R. 1155) in September 2013.
Then, in June of this year, the House Financial Services Committee attached the same NARAB II measure to a House bill that would extend reauthorization of the Terrorism Risk Insurance Act (TRIA) for five years. This measure, the TRIA Reform Act of 2014 (H.R. 4871), was voted out of committee but has not yet passed the full House.
In July, the Senate also attached NARAB II to a TRIA reauthorization bill. That bill is the Terrorism Risk Insurance Program Reauthorization Act of 2014 (S. 2244). The measure, which did pass the full Senate, would extend TRIA for seven years.
NAIFA prefers that the NARAB II legislation be enacted as a stand-alone measure. However, since two versions of TRIA reauthorization now have NARAB II attached, all eyes are on what happens with the TRIA reauthorization legislation, Hoffman said.
The outcome currently is uncertain since, at this writing, the House has not yet passed its reauthorization measure and because the two bills differ in several respects.
But Congress is under pressure to resolve their differences soon, as TRIA will sunset at the end of 2014 unless reauthorization is enacted.
NARAB II is not part of the TRIA debate, but since it is attached to both versions of TRIA, NARAB backers are watching the TRIA developments closely.
A sticking point, from NAIFA’s perspective, is that the Senate and House versions of NARAB II differ in small ways. In particular, “the Senate version would expire two years after the organization is up and running, while the House version has no expiration,” Hoffman said.
NAIFA prefers the House version of NARAB II, she said, because the industry would then know the NARAB organization would be permanent.
If the Senate version were to win out, the two-year clock would start running after the one to two years it will take to get the organization operational. “That would give us three to four years to make the legislation permanent,” she said.
NAIFA sees greater value in the organization being established as permanent from the very start, she indicated.
The House and Senate versions of NARAB II are similar in many if not most other respects. For instance, both NARAB II measures would create an organization to oversee insurance producer reciprocal non-resident licensing and continuing education standards on a national – not federal – level, according to NAIFA.
“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,” according to an issue brief prepared by the association. “Accepted 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.”
The benefit to consumers would be increased competition among agents and brokers and greater consumer choice, as well as continuity of client services, NAIFA said.
The issue that is bogging things down is election-year politics, not what’s in the NARAB II measure, Hoffman said. But enactment is very close, she added, so “producers should contact their congressional representatives right now. Let them know that it is critically important to enact NARAB II this year.”
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