By Megan R. Wilson - 03/19/13 09:42 PM EDT
If passed, a non-profit, private body would be set up to streamline the licensing process so that an agent wouldn’t need to get a new license in each state, while keeping a state’s ability to oversee and regulate the insurance sector intact.
“Who would be against this?” Tester asked the panel, testing potential resistance.
Montana State Auditor Monica J. Lindeen replied, “Honestly, senator, I think it’s a love fest.”
The two insurance trade group representatives sitting beside her – and real-life insurance brokers – nodded vigorously.
Only the two original sponsors showed up to question the witnesses, who overwhelmingly supported every aspect. In addition to Lindeen, who attended on behalf of the National Association of Insurance Commissioners, two members from the industry went to the Hill, in addition to a financial expert from the non-partisan Congressional Research Service.
Jon Jensen, with the Big “I,” the largest insurance agent and broker trade group in the country, said the legislation would be most beneficial to smaller firms.
While his office has the resources to hire individuals to keep up with licenses in each state, smaller firms may lack the manpower.
Only the expert with the Congressional Research Service, Baird Webel, expressed a bit of skepticism. Though the office does not endorse or oppose legislation, he said that even if the bill is drafted perfectly, it all comes down to how the details are implemented.
“Barriers can come up after legislation is actually written,” he said. “It is, to some degree, a federal preemption of state laws. And there are some people who will be unhappy about that.”
But, ultimately, the sea of support drowned him out.
The NARAB board would consist of 13 people appointed by the president and confirmed by the Senate. Eight of those would be required to be state insurance commissioners, while the other five could be from the insurance industry.
Further, before an insurance agent or firm could be accepted as a member into the board, they would have to undergo a federal criminal background check.
Congress and the industry have been battling this issue since 1933, said Scott Trofholz, with the Council of Insurance Agents and Brokers and the president and chief executive of Nebraska-based insurance agency.
The lawmakers agreed that now is the time to address it. The bill has 11 other co-sponsors.
“I’ve seen this issue rattle around, rattle around, rattle around,” Johanns said. “If there was ever a sweet spot to be achieved, this legislation hits that mark.”
But in a side conversation with guests following the hearing, Webel drove his point home: “If [state-level opponents] do try to create barriers, what happens?”