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Successful Effort is Positive for Agents/Brokers; More Work Needed

WASHINGTON, D.C., August 8—Today’s National Association of Insurance Commissioners (NAIC) preliminary determination that 35 states are in compliance with Gramm-Leach-Bliley Act (GLBA) licensing provisions is very positive news, although agents and brokers still need every state to be reciprocal in their licensing, says Robert A. Rusbuldt, CEO of the Independent Insurance Agents & Brokers of America (IIABA).

“This prelude to full NAIC certification is a big step in the right direction, and the reciprocity adopted by these states is a significant improvement over the system before GLBA. The state legislatures and regulators are taking the steps necessary to create for consumers, agents and brokers, and companies a more responsive and streamlined licensing system,” asserts Rusbuldt. “Today’s decision recognizes the countless hours, hard work and sweat equity that each of the 35 states (plus others) have invested to streamline the agent and broker multi-state licensing process. 

 “IIABA and its members commend the NAIC and each individual state for reaching this milestone and for stepping to the forefront to meet the challenge issued by the U.S. Congress,” says Rusbuldt. “Congressional leaders such as Financial Services Committee Chairman Mike Oxley (R-Ohio) and Oversight and Investigations Subcommittee Chairwoman Sue Kelly (R-N.Y.) laid the foundation for streamlining the licensing system. Without them, we would not be talking about these improvements today.

“Today’s certification, while the first step in the NAIC’s deliberative process, is significant, but much more must be done. IIABA will not rest until we have a system with all 51 states—counting the District of Columbia—having full reciprocity. The ultimate goal is licensing uniformity.”

The NAIC’s National Association of Registered Agents and Brokers (NARAB) Working Group today ruled that licensing laws approved by 35 states are in “technical compliance” with the NARAB licensing provisions of the GLBA. Under the statute, 29 states and U.S. territories are required to enact reciprocal or uniform licensing laws by Nov. 12 of this year. If the requisite number did not, NARAB would have been created, supplanting much of the regulatory authority of states over agent and broker licensing. Since the law’s enactment, states have focused their energies on passage of reciprocal laws.

In addition, the working group ruled that three other states will be in compliance when their laws take effect following the Nov. 12 deadline. A total of 46 states have passed legislation or adopted regulations intended to satisfy the GLBA reciprocity requirements. The states not credited with meeting the reciprocity standard fell short because they imposed fingerprint or surplus lines bond requirements on non-resident agents and brokers.

The working group’s certification recommendations are expected to be approved by the entire NAIC membership during a plenary session next month.

IIABA Vice President of State Government Affairs and State Relations Wesley Bissett agrees that the NAIC’s certification is a significant milestone, but also acknowledges that the licensing reform effort will not be complete until all states have acted.

“There is still much work to be done before agents and brokers have a true national licensing system,” explains Bissett. “A national licensing system will not work as intended unless all 50 states and the District of Columbia have laws or statutes on their books that meet or exceed the NARAB reciprocity requirements. Agents and brokers want and demand 100 percent state participation.”

To that end, Bissett says IIABA and its state affiliates will continue to push licensing reform in states that have not acted and to help states modify previously enacted laws to gain certification. “We will continue to work with the states, individual insurance commissioners and the NAIC to make reciprocity universal. We will not rest until 51 states are certified.”

 Bissett notes IIABA is following a two-track strategy in order to ensure universal licensing reciprocity without deviations by working with the states and advocating passage of a pragmatic regulation reform proposal in Congress that calls for the adoption of a more uniform, streamlined and efficient insurance regulatory system that includes a reciprocal licensing provision, all of which would still be regulated by the states. Bringing uniformity in regulation is an immediate benefit to IIABA member agencies and company partners. Agents and brokers need this now, and IIABA will work with the states, the NAIC and Congress to try and improve the state regulatory system.

“At the end of the day, IIABA believes the best way to bring about complete reciprocity without deviation is to have Congress pass the pragmatic proposal we have worked on with many of our company partners,” says Bissett.

The IIABA state regulatory reform proposal would use federal legislative action to overcome structural impediments to reform—rather than replacing the state-based system—to promote a more efficient and effective regulatory framework. While IIABA believes reforms are necessary and essential, it doesn’t believe the best attributes of the state regulatory system should be supplanted by a new federal regulator.  

Founded in 1896, IIABA is the nation’s oldest and largest national association of independent insurance agents and brokers, representing a network of more than 300,000 agents, brokers and their employees nationally. Its members are businesses that offer customers a choice of policies from a variety of insurance companies. Independent agents and brokers offer all lines of insurance—property, casualty, life and health—as well as employee benefit plans and retirement products. Web address: 

​127 South Peyton Street
Alexandria VA 22314
​phone: 800.221.7917
fax: 703.683.7556

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