Creating a federal regulatory option could cut U.S. producer licensing costs $268 million to $377 million per year.
Laureen Regan, an associate professor at Temple University, has published that estimate in an analysis commissioned by insurance industry groups that want Congress to permit insurers and producers to choose between state regulation and a new federal insurance regulatory system.
In addition to cutting licensing costs, an optional federal charter system would help producers by creating uniform requirements for pre-licensing and continuing education, Regan writes.
Regan's analysis was released by the American Council of Life Insurers, Washington, and the National Association of Independent Life Brokerage Agencies, Fairfax, Va.
The ACLI and NAILBA are backing the National Insurance Act, a bill introduced as S. 40 in the Senate by Sens. John Sununu, R-N.H. and Tim Johnson, D-S.D., and as H.R. 3200 in the House by Reps. Melissa Bean, D-Ill., and Edward Royce, R-Calif.
Regan reports that the typical insurance producer carries an average of 7.9 licenses, at a cost of about $100 per license.
An OFC system could cut the total cost of about $432 million by at least 60%. Regan writes.
S. 40 would let a producer use one license to sell products in all 50 states, and it "would also eliminate countersignature laws that require an out-of-state agent to have the signature of an in-state licensed agent and to share commissions before selling business in the state," Regan writes.
