January 16, 2015


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On January 11, President Obama signed Public Law No: 114-1, the Terrorism Risk Insurance Program Reauthorization Act of 2015 (TRIA). The House passed the bill, H.R. 26, last Tuesday, January 7, by a 416-5 vote and the Senate passed on a 94-4 vote last Thursday, January 9. This law renews the TRIA program that expired at the end of 2014 and provides a government backstop in case of another terrorist attack by providing reinsurance coverage to insurance companies following an act of terrorism. The program was originally established following the September 11, 2001, terrorist attacks and had been twice renewed. This renewal will reauthorize the program for another six years through the end of 2021.

A secondary provision of TRIA establishes a National Association of Registered Agents and Brokers (NARAB). This is a second attempt to create a national clearinghouse for producer registration across all states. An earlier version was passed as part of the Gramm-Leach-Bliley Act of 1999, but was never implemented because certain benchmarks were instead met by the majority of states to provide reciprocity for non-resident licensing via model producer licensing legislation created by the National Association of Insurance Commissioners (NAIC). The earlier version of NARAB followed the creation of the National Insurance Producer Registry (NIPR), which was established by the NAIC in 1996 to create a national producer licensing repository.

This version of NARAB (known as NARAB II) establishes a national organization to oversee insurance producer reciprocal non-resident licensing and continuing education standards. Under this program, producers may apply to become members of NARAB, pay a membership fee and state licensing fees in the states they would like to do business, and then NARAB members will receive a single non-resident license and complete a common continuing education requirement for each line of authority. Participation in NARAB will be entirely voluntary for producers and producers will still need to go through their home state to obtain a resident license to participate in NARAB. Furthermore, all producers that receive their uniform non-resident license through NARAB will still be subject to the authority of the insurance commissioners in all states in which they do business and will still need to abide by all relevant state and federal insurance statutes and regulations.     

The new NARAB organization will need to work through the federal regulatory process before it takes full effect. A first order of business for implementation will include President Obama appointing members to the 13-member board, to consist of eight insurance commissioners and five others with experience in producer licensing. Congress will then need to approve the board, which in turn, will hire staff and contractors to establish policies and procedures. The organization will then establish standards for producer members to meet in order to hold non-resident licenses in other states. The full implementation is expected to take at least two years.

NARAB will not be compulsory for any producer to register or become a member. Producers can continue to obtain licensing and complete continuing education requirements for their home state and any other state as they currently do. Becoming members of NARAB will help some agents and agencies that are active in many states to streamline their licensing and education requirements, but may not be the best or least expensive option for all producers. Each producer will need to consider the costs of membership and weigh those with the individual non-resident licensing costs for each state and the convenience factor to determine whether to become a member of NARAB.

NAHU did not actively engage in lobbying regarding TRIA and took a neutral position on the creation of NARAB II. However, via our involvement with the National Insurance Producer Registry (NAHU Senior Vice President of Government Affairs Jessica Waltman is a long-time member of the NIPR Board of Directors), we expect to be very involved with NARAB implementation, as the licensing data needed to establish and maintain NARAB II flows through NIPR.

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