When the Homeowner Flood Insurance Availability Act sailed through the Senate Monday night, there was much talk about maintaining the solvency of the National Flood Insurance Program and the legislation’s chances of passage in the House.
Few pundits, however, discussed the future of the agent licensing provisions attached to the bill.
Formerly known as the National Association of Registered Agents and Brokers Reform Act (NARAB), the licensing rules would create a nonprofit board of federal and state regulators allowing independent agents and brokers to obtain approval and licensing to operate in multiple states. To obtain approval, producers would need to meet board-established requirements and be fully licensed in his or her home state.
Robert Rusbuldt, president and CEO of the Independent Insurance Agents and Brokers of America, called NARAB “vitally important for tens of thousands” of producers who work in multiple states, and supported the pairing of the legislation with the flood insurance delay—another measure IIABA supports.
The bill passed easily in the Senate, 86-13. However, signals from the White House indicate passage of the NARAB provisions are anything but certain.
While the Obama Administration said it supports the policy goals of NARAB, it is concerned with provisions on conducting criminal history records checks on individuals applying for a multi-state license, calling it “inconsistent with the normal process” used by the FBI.
The White House also expressed “constitutional concerns” over the requirement that NARAB board membership be heavily weighted toward state insurance commissioners (eight of the 13 positions). This provision would “significantly constrict the pool of individuals from which the President would be able to make those eight nominations,” the administration said. It also “impermissibly limit[s] the scope of the President’s appointment power.”
The President may never have to make a call on the legislation, however, as flood insurance provisions face serious opposition in the House. Speaker John Boehner has already indicated he does not approve of widespread rate hike delays, saying he is considering “alternative ideas” to solve the oncoming rate hikes of up to 1000% for home and business owners in the South and coastal regions.
