NARAB II
NAIFA is working closely with two members of the House Financial Services Committee who will soon introduce legislation to ease the multi-state licensing system for insurance agents. Sponsored by Rep. David Scott (D-GA) and Rep. Geoff Davis (R-KY), the draft bill known as NARAB II, would establish a new licensure clearinghouse for insurance producers who choose to operate in multiple states.
Listen to the NAIFA GovPod that describes the NARAB II proposal.
What does NARAB stand for?
The concept of NARAB or the “National Association of Registered Agents & Brokers” was originally included in the Financial Services Modernization Act, known as the Gramm-Leach-Bliley Act (GLBA), which was enacted in 1999. The original NARAB would have established a licensure clearing house if a majority of the states did not enact reciprocity legislation within three years after the enactment of GLBA. Because the states determined that the threshold was satisfied, the clearing house was never established. However, issues burdening the ability for both individuals and agencies to obtain licenses on a multi-state basis remain, and the intent of the new effort – dubbed “NARAB II” – is to move forward with actually establishing the clearing house for interstate licensure.
What does NARAB II mean for NAIFA members?
The draft NARAB II bill is modeled closely on the original NARAB provisions. For NAIFA members, any producer (individual or agency) licensed in their home state could choose to join NARAB and be held to a single licensing and continuing education standard for every state in which they choose to do business. The NARAB standards would be determined by a board made up of insurance commissioners, producers and carriers. Through NARAB, any NAIFA member would be able to obtain a license to act as a producer in any state other than their home state by paying the required state licensure fees. Non-home states would be prohibited from imposing any other licensing or other qualifications to do business requirements.
Other quick facts about the NARAB II proposal:
- NARAB II is a draft proposal that is expected to be introduced in the U.S. House by spring of 2008.
- Membership in NARAB is optional.
- There will be fees for NARAB membership that will be established by the NARAB governing board.
- NARAB members would be governed by NARAB’s continuing education requirements and no state other than a producer’s home state could impose CE requirements on NARAB members.
- Non-resident states would continue to have the power to discipline NARAB licensed producers and to suspend their licenses.
- The NARAB Board must coordinate disciplinary efforts with the states and establish a consumer complaints office.
- The NARAB Board can seek a court order if necessary to enforce its disciplinary actions.
- The NARAB Board would be composed of insurance commissioners, insurance producers (including a NAIFA representative) and carriers.
- NARAB II does not create a federal regulator for insurance.
Staff Contact:
Jill Edwards
Director, Federal Relations
jilledwards@naifa.org
More Information
- U.S. House Prepares to Introduce Legislation to Streamline Agent Licensing (NAIFA GovTalk, March 3, 2008)
- NAIC Assesses State-By-State Producer Licensing Regulation (NAIFA GovTalk, March 3, 2008)
- March NAIFA GovPod Explains Federal Proposal to Create Agent Licensing Clearinghouse (NAIFA GovTalk, March 3, 2008)