Robert Rusbuldt, the IIABA CEO, on Sept. 20, had proposed a three-step reform plan calling for "vigorous, but targeted," reform and modernization of the current state regulatory system.

The keystone of the IIABA proposal is a new "NARAB," for National Association of Registered Agents and Brokers, an entity created by the 1999 Gramm-Leach-Bliley law that resulted in some state uniformity in licensing of producers.

But, in a response published today, Peter Ludgin, executive director of the new Agents for Change, said, while he applauded the IIABA proposal because ideas matter, "NARAB II is a band-aid solution.

"Today, some of the largest markets are not fully participating in NARAB, many states are not truly reciprocal, and it has done little to fix agency licensing problems," he said

Under the NARAB-II proposed by Mr. Rusbuldt, a new private, non-profit entity responsible for agent/broker licensing would be creating through federal law. It would be managed by a board that included state insurance regulators and industry representatives, including an independent agent.

In his op-ed piece, Mr. Rusbuldt says this entity "would give agents and brokers a choice between the current state-by-state licensing system and a national licensing portal (as long as that producer is duly licensed in a state).

"Agents and brokers comfortable with the current system and those licensed in one or a couple of states could choose to remain licensed in the traditional manner with no outside interference," Mr. Rusbuldt suggested in his comments.

"Producers operating in multiple jurisdictions unhappy with the current licensing burdens, however, could opt for NARAB and the ease of national licensing through a Self-Regulatory Organization (SRO)-type entity separate and apart from the federal government," he said.

For producers already licensed in a state, NARAB would effectively create one-stop producer licensing for additional non-resident licenses, Mr. Rusbuldt argued.

"It would preempt state laws regulating non-resident insurance producer licensing if they discriminate against NARAB agents based on non-residency, or if they impose additional licensing requirements on non-resident NARAB agents beyond those established by the NARAB board," he said. "This would be a significant reform for all agents who have non-resident licenses, and it can be accomplished without a federal regulator."

Mr. Rusbuldt's proposal also calls for significant reforms to be made to the product approval process life and property/casualty forms, and suggests that additional "federal tools," such as the legislation easing the process for the surplus insurance lines market, that recently passed the House, could be adopted.

All of these would forestall the need for an OFC, Mr. Rusbuldt contends.

Mr. Ludgin, however, disagrees. "Agents for Change believes in open markets, choice and competition," he said. "Any change must result in the best possible outcome for our customers" and "An OFC is the right fix."

"We live in a global marketplace," Mr. Ludgin added. "Shouldn't consumers be able to take advantage of competitive market forces in choosing their insurance, the same way they do in choosing their bank or credit card?

"An OFC will promote competition," Mr. Ludgin continued. "It may lower prices. And it will be a boon to consumers. An OFC is the right policy prescription for the 21st century."