8 months after passage, Feds urged to get a move on with NARAB

Although legislation establishing a national registration board for agents and brokers passed in January, no official moves have been made to get it up and running

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Eight months after Congress passed legislation establishing a national registration board for insurance agents and brokers, little has been done to bring that board into fruition and industry players are getting restless.

In a letter to Federal Insurance Office Director Michael McRaith, the executive director of a trade group representing wholesale brokers urged the immediate appointment to members of the board of the National Association of Registered Agents and Brokers.

“Unfortunately, the benefits of NARAB II are not able to be realized until such time as a board is appointed,” wrote Bernd G. Heinze of the American Association of Managing General Agents. “It is vitally important that the law be implemented as soon as possible.”

Under terms of the legislation, the White House must nominate a governing board of 13 people, eight of whom must have a regulatory background. The National Association of Insurance Commissioners has already nominated 14 people for the board, having submitted names in April.

No action has yet been taken, however – a speed bump that slows down what industry experts say will already be a slow process not expected to be operational until 2017.

Tim Owen, vice president of product management at Vertafore, works with 23 state insurance departments to build regulatory systems focused on producer licensing, among other areas. From that vantage point, he sees some hurdles the NAIC and others will have to face in their work to implement NARAB.

“There are a lot of operational and technological things we’ll have to figure out,” Owen told Insurance Business America in April. “There could be regulatory implications, such as certain kinds of education that not all states require, that might make it a challenge for NARAB to streamline the licensing process.”

There are additional discrepancies, such as California’s background requirements, Georgia’s stipulation that an agent have an affidavit of citizenship and New York’s decision not to adopt the Producer License Model Act, that NARAB board members must clear up.

Once established and operational, NARAB will create standards insurance producers must meet in order to business in other states , supplementing the current system, which asks producers to meet requirements in their home state and every other state in which the wish to operate.

Supporters of the legislation say NARAB will simplify licensing procedures and reduce costs. According to an analysis from the National Association of Independent Financial Advisors, producers currently spend about 29 hours a year and $225 in licensing costs in order to meet requirements.
 

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