Congress would be required to re-vote several years down the road on whether to sustain enactment of legislation creating a clearinghouse aimed at streamlining agent licensing, according to Senate legislation.
An agreement by the Senate leadership clearing the way for a vote today or Wednesday on legislation reauthorizing the Terrorism Risk Insurance Act (TRIA) for seven years allows a vote on an amendment that will establish the National Association of Registered Agents and Brokers (NARAB).
However, as the price for allowing the amendment to be added, Sen. Tom Coburn, R-Okla., insisted that a provision be included sunsetting NARAB two years after enactment.
Sen. John Tester, D-Montana, is sponsoring the NARAB amendment to the TRIA bill.
According to an industry lobbyist, Coburn last week threatened to hold up the entire TRIA bill if NARAB was offered.
The lobbyist said that Sen. Charles Schumer, D-N.Y., negotiated with Tester and Coburn and came up with a two-year sunset. But the clock on the sunset won't start ticking until the first license is issued, the lobbyist said. Moreover, the lobbyist said, it will probably take two years to get the program up and running.
An industry lawyer familiar with the bill said the requirement of the sunset provision is not necessarily fatal to the program.
Another official said, “Certainly it is our hope that the House and the Senate will ultimately agree, and NARAB will be created without a sunset.”
But this official added, “This agreement ensures that NARAB will be attached to the Senate [TRIA] bill, just as we now have assurances that NARAB will be attached to the House bill.”
The lawyer added, “Getting it up and running is the important thing. Once it gets going, it will prove itself.”
Indeed, another lobbyist said, “There is very strong, bipartisan, bicameral support for NARAB.”
The overall bill is S. 2244, the Terrorism Risk Insurance Program Reauthorization Act of 2014.
The bill extends the TRIA program in its current form for seven years, but does increase industry co-shares by one-third under a five-year phase-in period.
Legislation creating NARAB was reported out by the House Financial Services Committee without the sunset provision June 20. The House bill including establishment of NARAB is H. R. 4871, the TRIA Reform Act of 2014.
The NARAB legislation is modeled after the National Association of Securities Dealers (NASD). On a purely voluntary basis, agents and brokers can apply to NARAB for membership. Upon meeting the NARAB criteria, they can use the agency essentially as a “passport” system for multi-state licensure. NARAB's membership criteria will be established by a board that is dominated by state insurance commissioners.
“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.
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