Brokers Seek NARAB Implementation
Insurance broker and agent groups are urging the federal government to expedite the formation of the board that would oversee implementation of the 2015 National Association of Registered Agents and Brokers Act (NARAB II), which is intended to make it easier for brokers to sell insurance on a nationwide basis.
The NARAB board would drive a more efficient and streamlined licensing process for agents and brokers operating in multiple states.
Bernd G. Heinze, executive director of the American Association of Managing General Agents (AAMGA), said the creation of the new organization would go a long way toward alleviating the current burden of firms having to keep up with varying individual state licensing laws and continuing education compliance requirements.
“This is sapping the innovation and creativity of the underwriting process because they are spending more time trying to comply with anachronistic regulations, which also adds more costs to transactions with policyholders,” he said.
The most important priority is to get the NARAB board positions filled, because “nothing can happen until that occurs,” Heinze said.
“It’s been eight months and the [Federal Insurance Office] still has not appointed a board, and that is extremely discouraging,” he said.
The AAMGA recently sent a letter to Federal Insurance Office Director Michael McRaith requesting “your immediate selection and appointment of the NARAB board members.”
Joel Wood, senior vice president of government affairs at The Council of Insurance Agents and Brokers, said he and other CIAB leaders have had “numerous conversations” with FIO Director Michael McRaith, who has spent “a tremendous amount of time” vetting candidates for the NARAB board.
“Everyone has to undergo criminal background checks, and then they have to figure out all of the funding mechanisms, when they will first meet and all of the other technicalities,” he said.
“I think the board will be an effective mechanism to achieve the long-sought goals of uniformity.”
Wood said that while he believes the timeframe for board appointment is reasonable, he also thinks AAMGA’s letter was appropriate.
“The point was to really underscore the surplus line sector – don’t forget about them,” Wood said.
“We tend to think about licensure in buckets – property and casualty, life and health – but there is also this very sophisticated line, and AAMGA is laying down its marker in a respectful and appropriate manner.”
Jennifer McPhillips, assistant vice president of federal government affairs at the Independent Insurance Agents & Brokers of America, said the “vetting process is taking longer than initially thought, though this is the first time a board like this has been established.
“This first board will be critically important to the success of NARAB as it will chart the course for the future of the law. Once the board is operational and agents are approved for membership, they will be able to operate seamlessly between states.”
The new law was attached to the Terrorism Risk Insurance Program Reauthorization Act and signed into law by President Barack Obama last January. It created a nonprofit membership organization, NARAB, to be governed by state insurance commissioners and insurance market representatives.