The reauthorization of TRIA is big news (see here), but part of the TRIA bill was NARAB II, an important provision for all insurance agents and brokers. NARAB has been supported by key industry trade groups, such as NAPSLO, for quite a few years, and its passage is a big step in easing the burden and cost of multi-state licensing, particularly for smaller insurance agents and brokers.
The objective of NARAB II is to streamline multistate licensing for agents & brokers, including E&S (surplus lines) brokers, by establishing a national clearinghouse for one-stop licensing outside an agents/brokers home state. In effect, it replaces the state by state application and renewal process with one national process.
Some key provisions:
- The agent/broker must be licensed in good standing in its home state
- The agent/broker must join the organization to utilize the opportunities, but membership is optional
- A criminal background check & maintenance of high professional standards (including CE) will be required.
- The law does not appear to eliminate any state licensing fees.
- The law prohibits individual state requirements for nonresidents to register with the secretary of state.
- Nonresident states will still enforce their own insurance laws.
- Speculation is that the multi-state licensing process through NARAB will be electronic and quick.
Implementation is expected to take two years. Additional information can be found from key trade groups working on this important legislation: NAPSLO (here), ELANY (here), and the Big I (here). Also, a good summary from Locke Lord here.
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