News & Updates
Insurance Doomsday Averted – TRIA Extension Passes Congress January 9, 2015
Under the cloud of the tragic terrorist attack in France, the U.S. Congress passed H.R. 26, an extension to the Terrorism Risk Insurance Act (TRIA). The House passed it overwhelmingly by a vote of 416-5. The Senate passed it by a vote of 93-4. This despite a rider which amends Dodd-Frank.
Among its provisions, the bill extends the program for six years and gradually increases the trigger from $100 million to $200 million in increments of $20 million over the course of the six years, with the first increase taking place in 2016. It also raises the amount of recoupment to $37.5 billion.
H.R. 26 also re-establishes the National Association of Registered Agents and Brokers Reform Act (or NARAB as it is commonly called). While much progress has been made to improve uniformity and streamline non-resident producer licensing since passage of the Gramm-Leach-Bliley Act in 1999 (GLB), there has been concern the envisioned uniformity and reciprocity has never fully been achieved as there are still several large states that have not yet become reciprocal. The absence of these major states has inhibited the implementation of national licensing reciprocity and the ability of agents to obtain non-resident licenses in all fifty states.
A modified version of the national licensing proposal, the NARAB that was originally provided for in GLB (if producer-licensing uniformity or reciprocity was not achieved by November 2002) was also added to the TRIA extension bill that passed both houses of congress this week. Thus, H.R. 26 re-establishes NARAB which, when effective, will streamline the non-resident producer licensing process but preserve the states’ ability to protect consumers—it does not create a federal regulator for insurance and the states retain their regulatory authority over:
- licensing, continuing education, and other qualification requirements of insurance producers that are not members of the Association;
- resident or nonresident insurance producer appointment requirements;
- supervising and disciplining resident and nonresident insurance producers;
- establishing licensing fees for resident and nonresident insurance producers so that there is no loss of insurance producer licensing revenue to the State; and
- prescribing and enforcing laws and regulations regulating consumer protection, market conduct and unfair trade practices.
The states also will retain their rights over resident licensing.
The bill now goes to President Obama for his signature.
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