Are you an agent who knows the ins and outs of your licensing requirements?

In early 2010, the National Assn. of Registered Agents and Brokers Reform Act of 2009, known as NARAB II, reached approval in the U.S. House, but still needed backing in the Senate. Due to the fact this bill was introduced in a previous session of Congress, no more action can occur on it. The passage of NARAB would have led to a system where there is virtual uniformity through a comprehensive electronic database of producer details.

Agents and brokers, under this bill, would be allowed to sell insurance in any state in any line of coverage they are permitted to work in their home state. NARAB would have effectively coordinated with state insurance regulators to establish a central clearinghouse and the formation of a national database for “the collection of regulatory information concerning the activities of insurance producers.”

As it would have been set up, states would maintain regulatory jurisdiction over consumer protection, market conduct and unfair trade practices. States also would retain their rights as it relates to licensing, supervision, disciplining and determining the licensing fees for insurance agents.

A number of insurance industry experts noted that even though state insurance regulation has been productive, improvements still need to be put in place. One expert stated that the legislation would have improved licensing while making sure state authority over insurance continues. It would also have promoted greater consistency and maintained marketplace responsiveness. According to one U.S. House representative, the bill got large support from a variety of sectors in the insurance community and would not be a precursor to federal oversight of agents.

As it stands now, the agent inputs the needed information via an online form, fees are determined, which the agent then pays by a credit card. For resident licensing and renewals, agents can simply utilize the electronic check to pay for the procedure.

According to a January, 2011 statement from the Professional Insurance Agents (PIA), the group backs modernizing the existing regulation of producer licensing through state insurance departments. PIA believes this system has proven to be the most effective system for protecting consumers and maintaining a vibrant marketplace for the industry.

PIA notes that independent insurance agencies are increasingly operating in multiple jurisdictions and therefore often are required to gather and maintain multiple licenses. This has traditionally been a great burden on agencies, adding to their costs and taking precious resources away from serving their consumers. The state system is improving and PIA believes significant progress has been made over the last few years, though more work is needed in order to achieve a nationwide, state-based licensing system. PIA adds the best thing the new Congress can do to help agents achieve this goal is to continue to work with states to adopt more uniform laws.

In taking a look at the history of this legislation, this bill was proposed in a previous session of Congress. Sessions of Congress last two years, and at the end of each session all proposed bills and resolutions that haven't passed are cleared from the books. Members often reintroduce bills that did not come up for debate under a new number in the next session.

The question now is will this bill get another chance or will it be on hold for now?

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