“The Big ‘I’ is proud that all our hard work on TRIA and NARAB II has
come to fruition and will benefit thousands of small businesses and
insurance consumers across the country,” said Bob Rusbuldt, Independent
Insurance Agents and Brokers of America (Big “I”) president and CEO.
“Today’s bipartisan action by the Senate on both TRIA and NARAB II, in
one of the first acts of the new Congress, represents a culmination of
years of hard work of the Big ‘I’ and our small business members, and I
offer our members a sincere and heartfelt congratulations. Long awaited
reform on non-resident licensing for agents is finally coming.”
National Association of Registered Agents and Brokers (NARAB). They were able to have a bill passed in 2013 (click here).
There are insurance agents that have reciprocity and practice in more than one state. Each state has an insurance commissioner who has been issuing rules and regs regarding all forms of insurance. In order to have reciprocity (the practice of insurance sales in one state permits a person to seek that same capacity in another state) currently an agent has to prove they have an understanding of the state's regulations before selling a product. Basically, NARAB believes there are strong similarities in requirements for most states so there should not have to be repeated proofs for agents to practice in any state.
Example: Florida
Multi-State Exposures. (click here)
A person who is not a resident of Florida who sells, solicits, or negotiates a contract of insurance for commercial or residential property and casualty risks to an insured with risks located in more than one state insured under that contract, provided that the person is otherwise licensed as an insurance producer to sell, solicit or negotiate that insurance in the state where the insured maintains its principal place of business or residency and the contract of insurance insures risks located in that state, is not required to be licensed as a producer in Florida. Example: Mary Smith, a licensed property and casualty producer in Ohio, sells an insurance policy to a business in Ohio that also has branch locations in Florida. If the branch locations in Florida are on the master insurance contract in Ohio, then Mary Smith is not required to be licensed in Florida.
NARAB II (click here)
While much progress has been made to improve uniformity and streamline non-resident producer licensing, there has been concern the envisioned uniformity and reciprocity was never fully achieved as there remain several large states that have not yet become reciprocal. The absence of these major markets has inhibited the implementation of national licensing reciprocity and the ability of agents to obtain licenses in all of the states.
The problem with any action that allows homogenous requirements for those that have fiduciary (sorry for the big words - relationships requiring trust between strangers when one is the trustee and one is the beneficiary) responsibilities is that it allows for corporate take overs of large areas of population. I pretty much see it as an anti-trust problem.
Right now in the USA there are corporate insurance companies such as State Farm, Progressive, Allstate, etc. A person in California could have the same insurance company as their parent in let's say Kansas, but, they have different policies because each insurance commissioner sets the rules. They would also have different insurance agents.
In the last decade or so, there have become large insurers such as "esurance" that attract customers through media and within minutes have issued a policy. It is that movement creating the desire by insurance agents that want the right to sell insurance in all states without really qualifying for special permission.
The question in my mind is the "Independent Agent" going to disappear? If that occurs consumers will have poorer service. More and more business is done over the internet, so what happens to real persons in real life challenges to make a living and provide excellent service to their customers. Today, I can shop around for an insurance agent, will that always continue?
The upside of all these agent reciprocity requests is an increase in pricing competition. It will open up markets and it will benefit the consumer. The worry is will the competition destroy 'the agent economy' within a state and/or local economy?
National Association of Registered Agents and Brokers (NARAB). They were able to have a bill passed in 2013 (click here).
There are insurance agents that have reciprocity and practice in more than one state. Each state has an insurance commissioner who has been issuing rules and regs regarding all forms of insurance. In order to have reciprocity (the practice of insurance sales in one state permits a person to seek that same capacity in another state) currently an agent has to prove they have an understanding of the state's regulations before selling a product. Basically, NARAB believes there are strong similarities in requirements for most states so there should not have to be repeated proofs for agents to practice in any state.
Example: Florida
Multi-State Exposures. (click here)
A person who is not a resident of Florida who sells, solicits, or negotiates a contract of insurance for commercial or residential property and casualty risks to an insured with risks located in more than one state insured under that contract, provided that the person is otherwise licensed as an insurance producer to sell, solicit or negotiate that insurance in the state where the insured maintains its principal place of business or residency and the contract of insurance insures risks located in that state, is not required to be licensed as a producer in Florida. Example: Mary Smith, a licensed property and casualty producer in Ohio, sells an insurance policy to a business in Ohio that also has branch locations in Florida. If the branch locations in Florida are on the master insurance contract in Ohio, then Mary Smith is not required to be licensed in Florida.
NARAB II (click here)
While much progress has been made to improve uniformity and streamline non-resident producer licensing, there has been concern the envisioned uniformity and reciprocity was never fully achieved as there remain several large states that have not yet become reciprocal. The absence of these major markets has inhibited the implementation of national licensing reciprocity and the ability of agents to obtain licenses in all of the states.
The problem with any action that allows homogenous requirements for those that have fiduciary (sorry for the big words - relationships requiring trust between strangers when one is the trustee and one is the beneficiary) responsibilities is that it allows for corporate take overs of large areas of population. I pretty much see it as an anti-trust problem.
Right now in the USA there are corporate insurance companies such as State Farm, Progressive, Allstate, etc. A person in California could have the same insurance company as their parent in let's say Kansas, but, they have different policies because each insurance commissioner sets the rules. They would also have different insurance agents.
In the last decade or so, there have become large insurers such as "esurance" that attract customers through media and within minutes have issued a policy. It is that movement creating the desire by insurance agents that want the right to sell insurance in all states without really qualifying for special permission.
The question in my mind is the "Independent Agent" going to disappear? If that occurs consumers will have poorer service. More and more business is done over the internet, so what happens to real persons in real life challenges to make a living and provide excellent service to their customers. Today, I can shop around for an insurance agent, will that always continue?
The upside of all these agent reciprocity requests is an increase in pricing competition. It will open up markets and it will benefit the consumer. The worry is will the competition destroy 'the agent economy' within a state and/or local economy?
