As the risk and insurance requirements of policyholders cross state lines, annual state licensing compliance for agents and brokers has become increasingly difficult. It's challenging for agents to comply with anywhere from two to 50 state regulatory mandates.

Collaboration between insurance trade groups has enhanced multi-state licensing compliance,  advanced consumer protections and maintained state-based regulation. Back in 1999, those efforts proposed the creation of the National Assn. of Registered Agents & Brokers (NARAB). Because a minimum number of states achieved the required level of license reciprocity, NARAB did not come into fruition. However, as state licensing issues continue to increase, a new plan is needed.

NARAB II has been re-introduced with growing bipartisan support in both houses of Congress (S. 2342 and H.R. 1112). This common-sense legislation would create a streamlined agent and broker licensing system that strengthens the competitive insurance market while maintaining important consumer protections. In an increasingly mobile society, NARAB would allow agents and brokers efficiently operate on a multi-state basis by eliminating duplicative state licensing requirements and unnecessary costs.

Specifically, the bills create an interstate clearinghouse for insurance agents and brokers to obtain multi-state approval to operate. NARAB would be governed by a panel of state regulators and establish an ethical conduct code and standards for membership that exceed the existing requirements in any state. Membership in NARAB would be voluntary and not affect the rights of a non-member producer under any state license. Those applying for membership would be required to be fully licensed in their home states and satisfy rigorous membership criteria. An approved NARAB member could then use the clearinghouse to obtain the regulatory approval necessary to operate in any other selected jurisdiction. The legislation also has received the endorsement of the National Assn. of Insurance Commissioners.

Now is the opportunity for us to educate or elected representatives on the need for this producer licensing reform and ask for their cosponsorship and vote to approve the NARAB II bills.

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