NARAB bill passes Senate

In his comments, Crapo said that under the NARAB provisions, insurance commissioners of the states "will be able to better catch bad actors who, after losing a license in one state, will try to enter quickly into another state."

Crapo also said that state regulators will serve on the board of NARAB "with the same objectives they have as an insurance commissioner — to protect the public interest by promoting the fair and equitable treatment of insurance consumers."

He added that the creation of NARAB will allow agents and brokers to focus on their responsibilities to their clients and spend less time dealing with red tape. "By reducing costs and increasing competition among insurance producers, we will generate lower costs and better service for consumers," he said.

Importantly, Crapo said, NARAB deals specifically with marketplace entry and "would not impact a state's jurisdiction over day-to-day authority in the insurance marketplace. This is a very critical point, because I think probably the biggest issue relating to this legislation is preserving and protecting state's rights and state jurisdiction with regard to regulation of the insurance marketplace," he added.

The Senate bill does contain a provision demanded by Sen. Tom Coburn, R-Okla., that will require another vote to sustain NARAB within two years of the time it is up and running.

On the pc side, Charles Symington, IIABA senior vice president of external and government affairs, said that while the Senate bill contains the "sunset" provision "the IIABA would like to see changed before the measure is enacted into law, it was critically important to move the bill forward in the legislative process."

Symington said that the NARAB provision "would achieve much needed reciprocity in producer licensing and help policyholders by permitting greater competition among agents and brokers."

He said the bill "would build upon regulatory experience at the state level, promote greater consistency in agent and agency licensing, and ease the burden that many agents face in doing business across state lines."

Joel Wood, CIAB senior vice president of government affairs, said the CIAB is "pleased" that the legislation also includes "our long-sought NARAB proposal to create a uniform agent/broker nonresident licensure clearinghouse."

Wood said the sunset provision is not part of the legislation that has cleared the Financial Services Committee, "and we will strongly push to eliminate the sunset provision. The good news, however, is that if a TRIA compromise between the two chambers is reached this year, it is virtually certain that NARAB will be created," Wood said.