The Council Warns NARAB Reciprocity Standard Not Met in Largest Insurance Markets

Apr 30, 2001, 01:00 ET from Council of Insurance Agents + Brokers

    WASHINGTON, April 30 /PRNewswire/ -- States continue to make progress in
 enacting legislation necessary to avoid creation of the National Association
 of Registered Agents and Brokers (NARAB), in keeping with the requirements of
 the Gramm-Leach-Bliley Financial Modernization Act of 1999.  But the Council
 of Insurance Agents and Brokers, representing the largest agencies and
 brokerages in the United States, warns the effort is currently missing most of
 the large insurance markets in the United States.
     "Securing licensing reciprocity for less than half of the insurance
 marketplace would constitute winning the battle but losing the war," states
 Ken A. Crerar, The Council's president.
     In late April 2001, Arizona Governor Jane Hull signed into law a producer
 licensing bill based on the National Association of Insurance Commissioners'
 (NAIC) Producer Licensing Model Act, bringing to 17 the number of states to
 enact legislation necessary to meet the NARAB reciprocity standard.
 Currently, even with the addition of Arizona, the 17 states to enact the
 reciprocity standard account for 16 percent of total U.S. insurance premiums.
     "While we are heartened the pace of legislative activity has increased
 considerably this year, we are also concerned our worst nightmare will occur,"
 said Crerar.  "Our priority concern has been that the states enacting
 licensing reforms will not include some of the largest insurance markets in
 the U.S.:  New York, California, Florida, Texas, and Illinois.  As we move
 closer and closer to the 29-state threshold required to avert the creation of
 NARAB -- without reciprocity for the big markets -- our concerns continue to
 mount."
     Though legislative activity continues in a number of states, time is
 running out for many of those legislatures.  By the end of May 2001, 32 of the
 50 jurisdictions holding legislative sessions this year will adjourn,
 including the Florida, Illinois, and Texas legislatures.
     "We will continue to monitor the progress in the states to enact the
 legislation necessary to avoid NARAB's creation," said Crerar.  "While we
 believe it is likely that 29 states will do so by the November 2002 deadline,
 we are less sure that those 29 states will include all of the major insurance
 market states.  In our view, that situation would not represent the kind of
 progress and clarity we had hoped that NARAB would bring to the burdensome
 nonresident producer licensing process."
     Crerar said the leadership of the NAIC has done a good job in pushing for
 enactment of the Model Producer Licensing statute.  "Our hope is that at a
 certain point, a critical mass of states have approved licensing reciprocity,
 and, as a result, the political dynamics would change in the remaining
 intransigent states," he said.  "But it would be a great loss to our industry
 and its consumers if this massive effort to streamline the system fails to
 impact the overwhelming majority of insurance transactions."
     Founded in 1913, The Council of Insurance Agents + Brokers provides
 industry leadership while representing the largest, most productive and most
 profitable commercial insurance agencies and brokerage firms in the U.S.  The
 Council's members, operating in over 3,000 locations, place nearly 80 percent
 of all U.S. commercial property/casualty premiums, specializing in a wide
 range of insurance products and risk management services for business,
 industry, government and the public.  Operating nationally and
 internationally, The Council's members also administer billions of dollars in
 employee benefits.  Web site: http://www.ciab.com .
 
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SOURCE Council of Insurance Agents + Brokers
    WASHINGTON, April 30 /PRNewswire/ -- States continue to make progress in
 enacting legislation necessary to avoid creation of the National Association
 of Registered Agents and Brokers (NARAB), in keeping with the requirements of
 the Gramm-Leach-Bliley Financial Modernization Act of 1999.  But the Council
 of Insurance Agents and Brokers, representing the largest agencies and
 brokerages in the United States, warns the effort is currently missing most of
 the large insurance markets in the United States.
     "Securing licensing reciprocity for less than half of the insurance
 marketplace would constitute winning the battle but losing the war," states
 Ken A. Crerar, The Council's president.
     In late April 2001, Arizona Governor Jane Hull signed into law a producer
 licensing bill based on the National Association of Insurance Commissioners'
 (NAIC) Producer Licensing Model Act, bringing to 17 the number of states to
 enact legislation necessary to meet the NARAB reciprocity standard.
 Currently, even with the addition of Arizona, the 17 states to enact the
 reciprocity standard account for 16 percent of total U.S. insurance premiums.
     "While we are heartened the pace of legislative activity has increased
 considerably this year, we are also concerned our worst nightmare will occur,"
 said Crerar.  "Our priority concern has been that the states enacting
 licensing reforms will not include some of the largest insurance markets in
 the U.S.:  New York, California, Florida, Texas, and Illinois.  As we move
 closer and closer to the 29-state threshold required to avert the creation of
 NARAB -- without reciprocity for the big markets -- our concerns continue to
 mount."
     Though legislative activity continues in a number of states, time is
 running out for many of those legislatures.  By the end of May 2001, 32 of the
 50 jurisdictions holding legislative sessions this year will adjourn,
 including the Florida, Illinois, and Texas legislatures.
     "We will continue to monitor the progress in the states to enact the
 legislation necessary to avoid NARAB's creation," said Crerar.  "While we
 believe it is likely that 29 states will do so by the November 2002 deadline,
 we are less sure that those 29 states will include all of the major insurance
 market states.  In our view, that situation would not represent the kind of
 progress and clarity we had hoped that NARAB would bring to the burdensome
 nonresident producer licensing process."
     Crerar said the leadership of the NAIC has done a good job in pushing for
 enactment of the Model Producer Licensing statute.  "Our hope is that at a
 certain point, a critical mass of states have approved licensing reciprocity,
 and, as a result, the political dynamics would change in the remaining
 intransigent states," he said.  "But it would be a great loss to our industry
 and its consumers if this massive effort to streamline the system fails to
 impact the overwhelming majority of insurance transactions."
     Founded in 1913, The Council of Insurance Agents + Brokers provides
 industry leadership while representing the largest, most productive and most
 profitable commercial insurance agencies and brokerage firms in the U.S.  The
 Council's members, operating in over 3,000 locations, place nearly 80 percent
 of all U.S. commercial property/casualty premiums, specializing in a wide
 range of insurance products and risk management services for business,
 industry, government and the public.  Operating nationally and
 internationally, The Council's members also administer billions of dollars in
 employee benefits.  Web site: http://www.ciab.com .
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X71856137
 
 SOURCE  Council of Insurance Agents + Brokers