	Insurance Regulation and Federal Legislation

The individual states have been the primary regulators of insurance in this country for the past 150 years. The 1945 McCarran-Ferguson Act specifically authorized the states' role, and Congress has recognized state primacy in insurance regulation in more recent laws shaping the financial regulatory system, such as 1999's Gramm-Leach-Bliley Act (GLBA) and 2010's Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act). Organizations such as the National Association of Insurance Commissioners (NAIC) and the National Conference of Insurance Legislators (NCOIL) create model laws and undertake other steps to harmonize insurance regulation and laws across the country. To be legally binding, however, any models suggested by the NAIC or NCOIL must first be adopted in a state. The states may amend models to fit local circumstances or completely reject suggestions from outside groups. In the 113 th Congress, issues around licensing for insurance agents and brokers (known generally as insurance producers ) came to the fore in the form of legislation—the National Association of Registered Agents and Brokers Act, passed in different forms by both the Senate and the House. This legislation, which would mandate the creation of a National Association of Registered Agents and Brokers (NARAB), is generally referred to as "NARAB II" legislation. 26 , which included NARAB II provisions as Title II. Aspects of insurance producer licensing include specific education or knowledge requirements, such as passage of a written exam prior to licensing and continuing education afterward, and, in some states, criminal background checks. 26/P.L. Thus, it included NARAB II provisions in Title II, but did not include the Section 335 sunset language that had been included in the Senate-passed version of S. 2244 . The House and Senate passed H.R. 114-1 , on January 12, 2015. Summary of Enacted Provisions

P.L. The association will be overseen by a board of eight appointees who are current or former state insurance commissioners and five appointees with demonstrated expertise in different areas of insurance. To gain membership, insurance producers would have been required to be licensed as an insurance producer in their home state, pass a criminal background check, and meet other criteria determined by the association, which should not be "less protective of the public than that contained in the NAIC Producer Licensing Model Act." Appointments would have been made by the President with advice and consent by the Senate. Although largely similar to the original legislation, this amendment made changes to the bill, including
adding the Department of the Treasury as a conduit of information from NARAB to the President; requiring that copies of the NARAB bylaws, standards, and annual report be publically available on the NARAB website; and stipulating that the annual report be made to the President and the "States (including the State insurance regulators)" rather than the President and the NAIC (the NAIC was also removed from some, but not all, of the other reporting requirements in the bill). 1155 as passed by the House with one additional section. It would be a nonprofit, private body whose members would be required to be state-licensed insurance producers but could operate across states without having licenses from the individual states. The NARAB I language in GLBA also offered the states the opportunity to avoid creation of the NARAB organization if a majority of them created among themselves systems of either uniformity or reciprocity in insurance producer licensing within a three-year window after passage of GLBA. A sufficient number of states adopted laws providing for insurance producer licensing reciprocity that the NAIC determined the GLBA standards to avoid creation of the NARAB organization were met. Original NARAB Provisions

The first legislation specifically providing for the creation of a NARAB that the Congressional Research Service has been able to identify was introduced in the 102 nd Congress (Title IV of H.R.
The individual states have been the primary regulators of insurance in this country for the past 150 years. Congress specifically authorized the states' role in the 1945 McCarran-Ferguson Act (15 U.S.C. §§1011-1015), and state primacy in insurance regulation has been recognized in more recent laws shaping the financial regulatory system, such as the 1999 Gramm-Leach-Bliley Act (GLBA; P.L. 106-102) and the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (P.L. 111-203). The system of multiple state regulators, however, has faced criticism over the years, with frequent focus on its efficiency. One particular aspect of regulation that has been criticized by some as overly burdensome and inefficient is the licensure of insurance agents and brokers, known collectively as insurance producers. Every state requires specific licenses, sometimes with differing criteria, and insurance producers have identified the need to have multiple licenses as a significant expense.
Organizations such as the National Association of Insurance Commissioners (NAIC) and the National Conference of Insurance Legislators (NCOIL) create model laws and undertake other steps to harmonize insurance regulation and laws across the country, including the NAIC's promulgation of models for insurance producer licensing. The individual states, however, are sovereign entities, and any models suggested by the NAIC or NCOIL must first be enacted by state legislatures. The state authorities may amend models or completely reject suggestions from outside groups. Often this is done with the argument that laws and regulations need to be adapted to particular local circumstances or risks, such as hurricane risks along coastal areas.
Federal proposals addressing multiple state insurance producer licensing requirements through the creation of a National Association of Registered Agents and Brokers (NARAB) appeared as far back as the 102nd Congress, and a version of NARAB was included in GLBA. These GLBA provisions, known generally as "NARAB I," were conditional and would not come into effect if a majority of states passed laws providing for uniformity or reciprocity in insurance producer licensing. Although a sufficient number of states met the GLBA requirements and thereby prevented the creation of NARAB, insurance producers continued to identify issues in the state licensing system. As a consequence, "NARAB II" legislation, mandating the creation of a NARAB organization, has been introduced in every Congress since the 110th. It was passed by the House in the 110th and 111th Congresses.
In the 113th Congress, the National Association of Registered Agents and Brokers Act was introduced in both the Senate and the House and similar provisions were included in bills addressing flood insurance and terrorism insurance. Legislation including NARAB II provisions passed both the House and the Senate, but because they differed in some respects, no bill was sent to the President. In the 114th Congress, both the House and the Senate passed NARAB II provisions included as Title II of H.R. 26, which became P.L. 114-1. Under P.L. 114-1, membership in the NARAB organization will permit insurance producers to operate in multiple states without obtaining specific licenses from these states. To become a NARAB member, an insurance producer will be required to have a license from at least one state, pass a criminal background check, and meet other requirements. The law requires that these additional requirements be not "less protective to the public" than the NAIC model law on insurance producer licensing. The association is to be governed by a 13-member board made up of 8 current or former state insurance commissioners and 5 insurance industry experts. The President is to appoint the board, with advice and consent of the Senate, and retain the ability to remove the board and override the NARAB organization's rules or actions.