Senate Passes NARAB Legislation as Part of Flood Bill That Faces Hurdles in House.
The Senate today passed legislation re-establishing the National Association of Registered Agents and Brokers (NARAB).
It was passed as part of S. 1926, the Homeowner Flood Insurance Affordability Act of 2014 and National Association of Registered Agents and Brokers Reform Act of 2014. The bill now goes to the House.
See: Senate Votes to Delay Flood-Rate Hikes for 4 Years
Industry officials voiced strong support. Those commenting included the Council of Insurance Agents and Brokers (CIAB), the Independent Insurance Agents and Brokers of America (IIABA) and the American Association of Managing General Agents (AAMGA).
The overall bill passed the Senate, 67-32, but the real sign of support was in a vote rejecting an amendment by Sen. Tom Coburn, R-Okla., that would allow states to opt-out, a provision that concerns industry officials. The vote rejecting that amendment was 75-24.
At the same time, the overall bill faces significant opposition in the House due to the flood-insurance provisions and it is unclear when and if the legislation will be enacted.
The White House also seeks some changes in the legislation, as noted in a Statement of Administration Policy issued late Monday.
The legislation is modeled after the National Association of Securities Dealers (NASD) and will be a completely voluntary, self-regulating organization.
"The big concession we've made is on governance - that a majority of the governance has to come from state-insurance commissioners," one lobbyist involved said.
In seeking support for his amendment, Coburn said, "An opt-out keeping the 10th Amendment (state's rights) privileges of the state is required
to make sure that we do not go outside the bounds of our legal obligations."
But Sen. Mike Johanns, R-Neb., urged the Senate to reject the amendment. "We have worked so hard to get everybody on board," he said. "It does empower states. It does allow them to do what they need to do."
After the vote, Ken A. Crerar, CIAB president and CEO, said, This is a tremendous bipartisan victory; I don't know how we could have more successfully demonstrated the broad support for this reform."
He said the overwhelming vote rejecting the Coburn amendment "makes a strong statement."
Crerar recognized that "there are remaining significant hurdles in the flood legislation revolving around uncertainty of House action."
But he said "this is a great day, and we're feeling strongly that the decades of efforts on this issue are soon going to pay off."
Charles Symington, IIABA senior vice president for external and government affairs, called it a "big win for independent insurance agents."
He said the NARAB proposal has been a top priority of the IIABA for a number of years, adding, "On behalf of the quarter of a million professionals we represent across the country, we thank the bill sponsors and Senate leadership in both parties for their efforts to make this happen."
Bernd G. Heinze, AAMGA executive director, said the group "has worked diligently with the NAIC, our industry colleagues, and encouraged members to mount a grass roots effort to provide their congressmen and senators with personal examples that NARAB will provide."
He said that modernization of the market place "has been a foundation of our efforts in the state, national and international levels.
"Our focus has been on implementing processes and advocating regulatory and legislative efforts that will provide greater uniformity and efficiencies for agents, underwriters, program managers and brokers," Heinz said. "NARAB advances those principles, while maintaining important consumer protections and the state-based regulatory system."
As to the Coburn amendment, he said the amendment "would fundamentally change the dynamics by diluting NARAB's integrity and intent.
"Adding the opt-out provision proposed by Senator Coburn would only have preserved an unacceptable status quo and make it impossible to achieve true reciprocity and efficient compliance with state licensing requirements. NARAB was drafted to create a one-stop licensing compliance mechanism for the thousands of insurance agents and brokers who operate on a multi-state basis."
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|Publication:||Property and Casualty 360|
|Date:||Jan 30, 2014|
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