The Senate passed a bill this week that would re-establish a national licensing body for registered agents and brokers who want to sell retirement income products.
The National Association of Registered Agents and Brokers Reform Act of 2014, which was tacked on to the Homeowner Flood Insurance Affordability Act, would allow agents like broker-dealers to operate in many states without having to obtain individual licenses in each of those states. They would still have to be licensed in their home state, but as long as they had membership in the National Association of Registered Agents and Brokers, they would be permitted to operate in every other state.
NARAB maintains strict licensing and continuing education requirements and preserves all regulation of insurance at the state level. It also provides an additional layer of consumer protection by requiring the agents who become members to undergo criminal background checks.
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A survey by the Insured Retirement Institute early in 2013 found that 80 percent of respondents believe state regulations negatively impact annuity sales. Forty-six percent of respondents said they would be interested in selling more annuities, but 83 percent of those surveyed said it takes more time to sell annuities than other investments.
The IRI also found that it takes almost 22 hours per year for a broker-dealer to complete continuing education requirements and licensing renewals to sell annuities as opposed to fewer than 16 hours for selling securities.
"For the first time ever, the Senate has voted to pass NARAB II legislation to help streamline and improve the insurance licensing process for thousands of financial advisors across the nation. This significant action is an important step toward removing a regulatory barrier that has been impeding broker-dealers' ability and financial advisors' willingness to sell lifetime income products," said IRI President and CEO Cathy Weatherford in a statement.
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