WASHINGTON, D.C., April 16, 2008— The Independent Insurance Agents & Brokers of America (the Big “I”), the nation’s largest insurance association, testified today before a hearing of the House Committee on Financial Services Subcommittee on Capital Markets, Government Sponsored Enterprises, and Insurance, to discuss insurance regulatory reform.
Tom Minkler, an independent agent from New Hampshire, chairman of the IIABA government affairs committee and a recently elected member of IIABA’s executive committee, testified on the importance of maintaining the consumer protection strengths of the state-based insurance regulatory system while making needed improvements, specifically in the area of agent licensing.
Minkler testified that the most serious regulatory challenges facing insurance agents and brokers are the redundant, costly and sometimes contradictory requirements that arise when seeking licenses on a multi-state basis, and the root cause of these problems is the failure of many states to issue licenses on a truly reciprocal basis. To rectify this problem, IIABA strongly supports H.R. 5611, the NARAB Reform Act, introduced in March by Capital Markets Subcommittee Members David Scott (D-Ga.) and Geoff Davis (R-Ky.).
“This legislation would streamline nonresident insurance agent licensing, but is deferential to states’ rights – day-to-day state insurance laws and regulations would not be affected by this legislation,” Minkler said. “Given the strong bipartisan support for the NARAB Reform Act—there are already more than 30 cosponsors—we are excited about the prospects of this bill.”
Minkler emphasized that NARAB II would build upon regulatory experience maintained at the state level, promote consistency, establish true reciprocity for nonresident agents and enhance marketplace responsiveness. The result for all stakeholders would be a more efficient, modernized and workable system of insurance agent licensing.
“Our association has long asserted that the best method for addressing regulatory deficiencies is by enacting targeted legislation or federal legislative ‘tools’ that establish greater interstate consistency and streamline redundant oversight,” Minkler said. “The use of targeted and limited federal legislation on an as-needed basis can improve rather than dismantle the current state-based system and in the process produce a more efficient and effective regulatory framework.”
Founded in 1896, the Big “I” 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, health, employee benefit plans and retirement products. Web address: www.independentagent.com.