Pending Federal Legislation Aids Agents

By Bonnie Bochniak
Government Relations

Discussions over the past six months at our Nation’s Capitol in Washington D.C. to aid the agent community are finally seeing some action.  Both the United States Senate and United States House of Representatives are actively pursuing bipartisan legislation that allows insurance agents the ability to become licensed to sell insurance in multiple states.  House bill H.R. 1155 and Senate bill S. 534, dubbed the “National Association of Registered Agents and Brokers Reform Act of 2013” has a favorable chance of being approved by this Congress.

Currently, agents and brokers must be licensed in each state in which they do business. The National Association of Registered Agents and Brokers (NARAB)  would create a national – not federal – clearinghouse for insurance agents and brokers to obtain approval to operate on a multi-state basis. NARAB would be governed by a board dominated by state regulators and would establish standards for membership that meet or exceed the existing requirements in any state.

A prospective NARAB member would be required to be fully licensed in his or her home state and satisfy rigorous membership criteria for the national organization. Then an approved NARAB member could utilize the clearinghouse to obtain approval to operate in any other state. States would retain their regulatory jurisdiction over consumer protection, market conduct and unfair trade practices, and would retain their rights over licensing, supervision, disciplining and the setting of licensing fees for insurance producers.

In essence, this legislation will allow agents and brokers more flexibility in offering products and also the ability to adapt to their clientele to continue to service them where ever life may lead. This legislation has been deemed a cost-effective and a common-sense approach to help this industry better service its customers and building stronger relationships.

The Michigan Business and Professional Association (MBPA) will continue to keep you updated as this legislation continues to move through the process at our Nation’s Capitol. If you have any questions regarding this article or issue, please contact our Government Relations Team at: 586-393-8800 or by email at bbochniak@michbusiness.org