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Round and round she goes, but where NFIP ends up, nobody knows p5

Fri Feb 14th, 2014 on     Insurance Law,    

We are finishing up our discussion of the Senate bill that would delay National Flood Insurance Program rate increases. The bill was tied to another insurance-related bill, the National Association of Registered Agents and Brokers Reform Act.

As the law stands now, an agent in Florida, say, cannot sell insurance in a neighboring state without going through the full licensure process of that state. The NARAB would provide a more direct route for insurance agents and brokers to operate outside of their home states.

The bill establishes a national board that would adopt strict licensure standards for insurance agents and brokers, standards more demanding than the most demanding state standards. Agents would apply to the board for approval; if granted, the agent would present the approval to the state in lieu of proof of completion of certain educational requirements, for example.

The White House voiced some concerns with parts of the NARAB bill. First, the board would conduct criminal background checks on agents applying for membership, but the process described in the bill is “inconsistent” with the process used by the FBI. A fix would be relatively easy and would not undermine the proposal in any way.

Another provision could derail the proposal, though. As proposed, the bill would require that the president appoint eight state insurance commissioners to the 13-member board. The White House said that restricting the president’s appointment power in that way could be unconstitutional. The recommended fix would be to expand the pool of candidates beyond insurance commissioners.

As of this writing, the Senate has not responded to the White House’s assessment. The bill is in the House awaiting a vote by the full chamber.


Insurance Journal, “White House Balks at Flood Insurance Delay, Agent Licensing Bill,” Andrew G. Simpson, Jan. 28, 2014

Insurance Journal, “Senate Links Agent Licensing Reform with Flood Insurance Delay,” Andrew G. Simpson, Jan. 21, 2014

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