While the major news was that the House and the Senate had approved the extension of the termination date of the Federal Terrorism Insurance Program, for producers the second part of that bill may prove more important. Title II of the Act, The “National Association of Registered Agents and Brokers Reform Act of 2015” will establish an independent nonprofit corporation, the National Association of Registered Agents and Brokers (NARAB) that will issue insurance producers multi-state licenses with uniform licensing and continuing education requirements.
Producers may apply for membership in NARAB and if approved obtain national licensing
The NARAB will be authorized to: 1) establish membership criteria, including requiring criminal background checks; and 2) deny membership based upon information obtained. The provision authorizes NARAB to establish classes of membership, membership criteria, and deny membership for failure to meet criteria.
The law also requires NARAB to receive and investigate consumer complaints via a toll-free telephone number, and to refer complaints to the state insurance regulator. Finally, the provision authorizes NARAB to coordinate with state regulators to establish a central clearinghouse and a national database for collecting regulatory information.
The NARAB’s specific jurisdiction will be the oversight of insurance producer reciprocal non-resident licensing and continuing education standards on a national–not federal–level. Any producer (individual or agency) licensed in their home state may apply to NARAB, submit to a federal criminal background check. Assuming the applicant is not rejected, upon becoming an NARAB member, the producer would pay a membership fee as well as all requisite state licensing fees for each state in which they choose to do business.
Single non-resident license and uniform continuing education standards
NARAB members would only have a single non-resident licensing and continuing education standard for each line of authority. The NARAB standards would be determined by a 13-member board made up of eight insurance commissioners and five individuals with relevant expertise and experience in producer licensing.
In supporting the passage of what ultimately passed as The “National Association of Registered Agents and Brokers Reform Act of 2015” the Big “I” and the NAIC have stated that simplified uniform non-resident licensing through NARAB:
- will promote consistency in agent and agency licensing across the country;
- will improve market responsiveness;
- will streamline the non-resident insurance agent and broker licensing process;
- will not interfere with state insurance regulations nor state consumer protection laws;
- will promote reciprocity in producer licensing;
- will promote greater competition among agents and brokers in offerings for policyholders.