The Federal Insurance Office report, “How To Modernize And Improve The System Of Insurance Regulation In the United States,” explains how NARAB II legislation, which has passed the House and is pending in the Senate, would intend to establish uniformity and conformity across state jurisdictions in the licensing of insurance agents.
In explaining the problems faced by agents who operate in multiple states, the FIO cites NAIFA research:
Consumers are detrimentally affected by the absence of uniformity and reciprocity in producer licensing. For example, in an increasingly mobile society, many consumers who move across state lines may prefer to maintain a relationship with a producer based in another state. The National Association of Insurance and Financial Advisors reported, however, that 80 percent of its surveyed members were unable to serve a client who moved to another state, and 12 percent of its members were unable to serve 50 or more clients who had moved to a state in which the producer was unlicensed.
Should NARAB II become law, the report says, the FIO will monitor implementation of the legislation to ensure:
- The interests of consumers are a priority
- Concerns and interests of state insurance commissioners who cannot serve on the NARAB board due to laws in their states are addressed
- It provides “producers an efficient and streamlined multistate licensing mechanism.”