Terrorism Risk Insurance Program Authorization Act

Floor Speech

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Mr. TESTER. I thank Chairman Johnson and Ranking Member Crapo and Senators Schumer and Heller for their hard work on helping me on the TRIA bill and for helping me on this amendment, as well as Senator SCHUMER and Senator HELLER for their hard work not only on the TRIA legislation but also on the NARAB amendment, which I am going to talk about in a moment. I also wish to give a special thank-you to Senator Johanns, who is a cosponsor on this amendment and somebody with whom I have worked very closely to get this amendment to the point it is today.

The Tester-Johanns amendment is the National Association of Registered Agents and Brokers Act, otherwise known as NARAB. NARAB is a bill Senator Johanns and I introduced last year. It was reported out of the Banking, Housing, and Urban Affairs Committee on a voice vote.

Our amendment creates a nonprofit association to provide one-stop licensing for insurance agents and brokers operating outside of their home State. This arrangement would fully preserve the authority of State insurance regulators to supervise these markets.

Currently, an insurance agent or broker seeking to operate in multiple States must meet different State-specific licensing requirements and seek approval from each State's insurance commissioner. This process is time consuming, it is costly, it is redundant, and it is sometimes contradictory--without providing any greater consumer protection. That is a big disincentive for smaller agents and brokers to grow their businesses.

This is not a new issue for the insurance industry. Congress recognized the need for a forum to reform the insurance licensing system in 1999 when it incorporated the National Association of Registered Agents and Brokers Act subtitle into the Gramm-Leach-Bliley Act. Unfortunately, at that time Congress did not immediately establish NARAB. As a result, Gramm-Leach-Bliley did not achieve the level of reciprocity and uniformity Congress expected and these efforts to streamline cross-state insurance licensing never took hold. That is why this important amendment is before the Senate today.

Senator Johanns' and my amendment would provide insurance agents and brokers with the option of becoming a member of NARAB provided that they meet the professional standards set by the association and undergo a criminal background check.

NARAB will streamline the licensing process for agents and brokers, enabling them to be licensed under one single, strong national licensing standard rather than following different State standards, thereby saving time and money.

In addition to setting rigorous professional standards, the association will let agents and brokers renew their licenses all at once and fully preserve the abilities of regulators to protect consumers and supervise and discipline agents and brokers.

Currently, on average, insurance agents sell their products in eight States, with many serving even more. A one-stop licensing compliance mechanism will benefit all agents and brokers but particularly the smaller folks who must spend time and money dealing with different standards in different States.

A one-stop shop for insurance licensing will help smaller players compete against the bigger competitors. That is good for business, and it is good for consumers.

NARAB represents a decade of effort, and I am pleased we will finally achieve the goals laid out in Gramm-Leach-Bliley. Some feared NARAB would diminish States rights. As a former State legislator, when folks start talking about States rights issues, I pay attention, but in this case I believe they are wrong.

I wish to take a minute and talk about how

this amendment protects States rights. Under this amendment, States would retain all authority to license their own resident agents and brokers. The association would be required to notify States when agents and brokers apply for membership, letting the States notify NARAB of any reason membership should not be granted to the producer.

States will also have significant control over NARAB. The nonprofit association would be governed by a board of directors dominated by State insurance regulators and chaired by a State insurance regulator. Most importantly, NARAB deals only with marketplace entry and would not impact the day-to-day regulation of insurance. States will maintain exclusive control of the regulation of marketplace activities, consumer protection requirements, unfair trade practices, and other important areas.

Under this bill, under this amendment, we will preserve the authority of States to supervise insurance producers. Any agent or broker who obtains the authority to operate in a jurisdiction through NARAB is still subject to the full regulatory authority of that State and must comply with all marketplace requirements. Under our amendment, States will continue to receive insurance licensing fees, which will be collected by NARAB and remitted to the States.

This legislation is supported by the National Association of Insurance and Financial Advisers, the Council of Insurance Agents and Brokers, and the Independent Insurance Agents and Brokers of America. It is also supported by the National Association of Insurance Commissioners, which has expressed its full support for this bill and the final TRIA bill.

I urge my colleagues to support the Tester-Johanns amendment. It is truly a commonsense amendment that helps not only the industry but also the consumers.

I yield the floor.

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