[Congressional Record Volume 156, Number 29 (Wednesday, March 3, 2010)]
[House]
[Pages H1071-H1076]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
NATIONAL ASSOCIATION OF REGISTERED AGENTS AND BROKERS REFORM ACT OF
2010
Mr. SCOTT of Georgia. Mr. Speaker, I move to suspend the rules and
pass the bill (H.R. 2554) to reform the National Association of
Registered Agents and Brokers, and for other purposes, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 2554
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``National Association of
Registered Agents and Brokers Reform Act of 2010''.
SEC. 2. REESTABLISHMENT OF THE NATIONAL ASSOCIATION OF
REGISTERED AGENTS AND BROKERS.
(a) In General.--Subtitle C of title III of the Gramm-
Leach-Bliley Act (15 U.S.C. 6751 et seq.) is amended to read
as follows:
``Subtitle C--National Association of Registered Agents and Brokers
``SEC. 321. NATIONAL ASSOCIATION OF REGISTERED AGENTS AND
BROKERS.
``(a) Establishment.--There is established the National
Association of Registered Agents and Brokers (hereafter in
this subtitle referred to as the `Association').
``(b) Status.--The Association shall--
``(1) be a nonprofit corporation;
``(2) have succession until dissolved by an Act of
Congress;
``(3) not be an agent or instrumentality of the United
States Government; and
``(4) except as otherwise provided in this subtitle, be
subject to, and have all the powers conferred upon a
nonprofit corporation
[[Page H1072]]
by the District of Columbia Nonprofit Corporation Act (D.C.
Code, sec. 29-301.01 et seq.).
``SEC. 322. PURPOSE.
``The purpose of the Association shall be to provide a
mechanism through which licensing, continuing education, and
other nonresident insurance producer qualification
requirements and conditions can be adopted and applied on a
multi-state basis (without affecting the laws, rules, and
regulations pertaining to resident insurance producers or
appointments or producing a net loss of producer licensing
revenues to States), while preserving the right of States to
license, supervise, discipline, and establish licensing fees
for insurance producers, and to prescribe and enforce laws
and regulations with regard to insurance-related consumer
protection and unfair trade practices.
``SEC. 323. MEMBERSHIP.
``(a) Eligibility.--
``(1) In general.--Any insurance producer licensed in its
home State shall, subject to paragraphs (2) and (4), be
eligible to become a member of the Association.
``(2) Ineligibility for suspension or revocation of
license.--Subject to paragraph (3), an insurance producer is
not eligible to become a member of the Association if a State
insurance regulator has suspended or revoked such producer's
license in that State during the 3-year period preceding the
date on which such producer applies for membership.
``(3) Resumption of eligibility.--Paragraph (2) shall cease
to apply to any insurance producer if--
``(A) the State insurance regulator reissues or renews the
license of such producer in the State in which the license
was suspended or revoked; or
``(B) the suspension or revocation is subsequently
overturned.
``(4) Criminal background record check required.--
``(A) In general.--An insurance producer shall not be
eligible to become a member of the Association unless the
producer has undergone a national criminal background record
check that complies with regulations prescribed by the
Attorney General under subparagraph (L).
``(B) Criminal background record check requested by home
state.--An insurance producer who is licensed in a State and
who has undergone a national criminal background record check
in compliance with such requirements as a condition for such
licensure shall be deemed to have undergone a national
criminal background record check for purposes of subparagraph
(A).
``(C) Criminal background record check requested by
association.--
``(i) In general.--The Association shall, upon request by
an insurance producer licensed in a State, submit
identification information obtained from such producer, and a
request for a national criminal background record check of
such producer, to the Federal Bureau of Investigation.
``(ii) Bylaws or rules.--The board of directors of the
Association shall prescribe bylaws or rules for obtaining and
utilizing identification information and criminal history
record information, including the establishment of reasonable
fees required to perform a criminal background record check
and appropriate safeguards for maintaining confidentiality
and security of the information.
``(D) Form of request.--A submission under subparagraph
(C)(i) shall include such identification information as
required by the Attorney General concerning the person about
whom the record is requested and a statement signed by the
person authorizing the Association to obtain the information.
``(E) Provision of information by attorney general.--Upon
receiving a submission under subparagraph (C)(ii) from the
Association, the Attorney General shall search all records of
the Criminal Justice Information Services Division of the
Federal Bureau of Investigation that the Attorney General
deems appropriate for criminal history records corresponding
to the identification information provided under subparagraph
(D) and provide all information contained in such records
that pertains to the request to the Association.
``(F) Limitation on permissible uses of information.--The
Association may use information provided under subparagraph
(E) only--
``(i) for purposes of determining compliance with
membership criteria established by the Association;
``(ii) to disclose to State insurance regulators, or
Federal or State law enforcement agencies, in conformance
with applicable law.
``(G) Applicant access to criminal history records.--
Notwithstanding subparagraph (F), a producer shall have the
right to obtain from the Association a copy of any criminal
history record information concerning the producer that is
provided to the Association under subparagraph (E).
``(H) Penalty for improper use or disclosure.-- Whoever
knowingly uses any information provided under subparagraph
(E) for a purpose not authorized in subparagraph (F), or
discloses any such information to anyone not authorized to
receive it, shall be fined under title 18, United States
Code, imprisoned for not more than 2 years, or both.
``(I) Reliance on information.--Neither the Association nor
any of its directors, officers, or employees shall be liable
in any action for using information provided under
subparagraph (E) as permitted under subparagraph (F) in good
faith and in reasonable reliance on its accuracy.
``(J) Fees.--The Attorney General may charge a reasonable
fee to defray the expense of conducting the search and
providing the information under subparagraph (E), and any
such fee shall be collected and remitted by the Association.
``(K) Rule of construction.--Nothing in this paragraph
shall be construed as--
``(i) requiring a State insurance regulator to perform
criminal background checks under this section; or
``(ii) limiting any other authority that allows access to
criminal background records.
``(L) Regulations.--The Attorney General shall prescribe
regulations to carry out this paragraph, which shall
include--
``(i) appropriate protections for ensuring the
confidentiality of information provided under subparagraph
(E); and
``(ii) procedures providing a reasonable opportunity for a
producer to contest the accuracy of information regarding the
producer provided under subparagraph (E).
``(M) Ineligibility for membership.--
``(i) In general.--The Association may, under reasonably
consistently applied standards, deny membership to an
insurance producer on the basis of criminal history
information provided under subparagraph (E).
``(ii) Rights of applicants denied membership.--The
Association shall notify any producer who is denied
membership on the basis of criminal history record
information provided under subparagraph (E) of the right of
the producer to--
``(I) obtain a copy of all criminal history record
information provided to the Association under subparagraph
(E) with respect to the producer; and
``(II) challenge the accuracy and completeness of the
information.
``(b) Authority To Establish Membership Criteria.--The
Association may establish membership criteria that--
``(1) bear a reasonable relationship to the purposes for
which the Association was established; and
``(2) do not unfairly limit the access of smaller agencies
to the Association membership, including imposing
discriminatory membership fees on smaller insurance
producers.
``(c) Establishment of Classes and Categories of
Membership.--
``(1) Classes of membership.--The Association may establish
separate classes of membership, with separate criteria, if
the Association reasonably determines that performance of
different duties requires different levels of education,
training, experience, or other qualifications.
``(2) Categories.--
``(A) Separate categories for producers permitted.--The
Association may establish separate categories of membership
for producers and for other persons within each class, based
on the types of licensing categories that exist under State
laws.
``(B) Separate treatment for depository institutions
prohibited.--No special categories of membership, and no
distinct membership criteria, shall be established for
members which are depository institutions or for employees,
agents, or affiliates of depository institutions.
``(d) Membership Criteria.--
``(1) In general.--The Association may establish criteria
for membership which shall include standards for personal
qualifications, education, training, and experience.
``(2) Qualifications.--In establishing criteria under
paragraph (1), the Association shall consider the NAIC
Producer Licensing Model Act and the highest levels of
insurance producer qualifications established under the
licensing laws of the States.
``(3) Assistance from states.--
``(A) In general.--The Association may request a State to
provide assistance in investigating and evaluating a
prospective member's eligibility for membership in the
Association.
``(B) Rule of construction.--Subparagraph (A) shall not be
construed as requiring or authorizing any State to adopt new
or additional requirements concerning the licensing or
evaluation of insurance producers.
``(4) Denial of membership.--The Association may, based on
reasonably consistently applied standards, deny membership to
any State-licensed insurance producer for failure to meet the
membership criteria established by the Association.
``(e) Effect of Membership.--
``(1) Authority of association members.--Membership in the
Association shall--
``(A) authorize an insurance producer to sell, solicit,
negotiate, effect, procure, deliver, renew, continue, or bind
insurance in any State for which the member pays the
licensing fee set by such State for any line or lines of
insurance specified in such producer's home State license,
and exercise all such incidental powers, as shall be
necessary to carry out such activities, including claims
adjustments and settlement, risk management, employee
benefits advice, retirement planning, and any other
insurance-related consulting activities;
``(B) be the equivalent of a nonresident insurance producer
license issued in any State where the member pays the
licensing fee; and
``(C) subject an insurance producer to all laws,
regulations, provisions or other action of any State
concerning revocation or suspension of a member's ability to
engage in any activity within the scope of authority granted
under this subsection and to all
[[Page H1073]]
State laws, regulations, provisions and actions preserved
under paragraph (5).
``(2) Duplicative licenses.--No State, other than the
member's home State, may require an individual member to
obtain a business entity license or membership in order to
engage in any activity within the scope of authority granted
in paragraph (1) or in order for the member or any employer,
employee, or affiliate of the member to receive compensation
for the member's performance of any such activity.
``(3) Agent for remitting fees.--The Association shall act
as any member's agent for purposes of remitting licensing
fees to any State pursuant to paragraph (1).
``(4) Regulator notification.--The Association shall notify
the National Association of Insurance Commissioners
(hereinafter in this subtitle referred to as the `NAIC') or
its designee when a producer becomes a member and identify,
on an ongoing basis, the States in which the member is
authorized to operate.
``(5) Preservation of state consumer protection and market
conduct regulation.--No provision of this section shall be
construed as altering or affecting the continuing
effectiveness of any law, regulation, provision, or other
action of any State which purports to regulate market conduct
or unfair trade practices or establish consumer protections
to the extent that such law, regulation, provision, or other
action is not inconsistent with the provisions of this
subtitle, and then only to the extent of such inconsistency.
``(f) Biennial Renewal.--Membership in the Association
shall be renewed on a biennial basis.
``(g) Continuing Education.--
``(1) In general.--The Association shall establish, as a
condition of membership, continuing education requirements
which shall be comparable to the continuing education
requirements under the licensing laws of a majority of the
States.
``(2) State continuing education requirements.--A member
may not be required to satisfy continuing education
requirements imposed under the laws, regulations, provisions,
or actions of any State other than such member's home State.
``(3) Reciprocity.--The Association shall not require a
member to satisfy continuing education requirements that are
equivalent to any continuing education requirements of the
member's home State that have been satisfied by the member
during the applicable licensing period.
``(4) Limitation on association.--The Association shall not
directly or indirectly offer any continuing education courses
for insurance producers.
``(h) Probation, Suspension and Revocation.--
``(1) Disciplinary action.--The Association may place an
insurance producer that is a member of the Association on
probation or suspend or revoke such producer's membership in
the Association, as the Association determines to be
appropriate, if--
``(A) the producer fails to meet the applicable membership
criteria of the Association; or
``(B) the producer has been subject to disciplinary action
pursuant to a final adjudicatory proceeding under the
jurisdiction of a State insurance regulator.
``(2) Reporting to state regulators.--The Association shall
notify the NAIC or its designee when a producer's membership
has been suspended, revoked, and otherwise terminated.
``(i) Consumer Complaints.--
``(1) In general.--The Association shall--
``(A) receive and, when appropriate, investigate complaints
from both consumers and State insurance regulators related to
members of the Association;
``(B) refer any proper complaint received in accordance
with subparagraph (A) and make any related records and
information available to the NAIC or its designee and to each
State insurance regulator for the State of residence of the
consumer who filed the complaint; and
``(C) refer, when appropriate, any such complaint to any
additional appropriate State insurance regulator.
``(2) Telephone and other access.--The Association shall
maintain a toll-free telephone number for the purpose of this
subsection and, as practicable, other alternative means of
communication with consumers, such as an Internet web page.
``SEC. 324. BOARD OF DIRECTORS.
``(a) Establishment.--There is established the board of
directors of the Association (hereafter in this subtitle
referred to as the `Board'), which shall have authority to
govern and supervise all activities of the Association.
``(b) Powers.--The Board shall have such of the
Association's powers and authority as may be specified in the
bylaws of the Association.
``(c) Composition.--
``(1) In general.--The Board shall consist of 11 members
who shall be appointed by the President, by and with the
advice and consent of the Senate, of whom--
``(A) 6 shall be State insurance commissioners appointed in
the manner provided in paragraph (2),
``(B) 2 shall be representatives of property and casualty
insurance producers,
``(C) 1 shall be a representative of life or health
insurance producers,
``(D) 1 shall be a representative of property and casualty
insurers, and
``(E) 1 shall be a representative of life or health
insurers.
``(2) State insurance regulator representatives.--
``(A) Before making any appointments pursuant to
subparagraph (A) of paragraph (1), the President shall
request a list of recommended candidates from the NAIC, which
shall not be binding on the President. If the NAIC fails to
submit list of recommendations within 15 days of the request,
the President may make the requisite appointments without
considering the views of the NAIC.
``(B) Not more than 3 members appointed to membership on
the Board pursuant to subparagraph (A) of paragraph (1) shall
belong to the same political party.
``(C) If fewer than 6 State insurance commissioners accept
appointment to the Board, the President may appoint the
remaining State insurance commissioner members of the Board
from among individuals who are former State insurance
commissioners, provided that any former insurance
commissioner so appointed shall not be employed by or have a
present direct or indirect financial interest in any insurer
or other entity in the insurance industry other than direct
or indirect ownership of, or beneficial interest in, an
insurance policy or annuity contract written or sold by an
insurer.
``(3) Private sector representatives.--In making any
appointments pursuant to subparagraphs (B) through (E) of
paragraph (1), the President may seek recommendations for
candidates from national trade associations representing the
category of individuals described, which shall not be binding
on the President.
``(4) State insurance commissioner defined.--For purposes
of this subsection, the term `State insurance commissioner'
means a person who serves in the position in State
government, or on the board, commission, or other body that
is the principal insurance regulatory authority for the
State.
``(d) Terms.--
``(1) In general.--The term of each Board member shall be
for 2 years, except that--
``(A) the term of--
``(i) 3 of the State insurance commissioner members of the
Board initially appointed under subparagraph (A) of paragraph
(1),
``(ii) 1 of the property and casualty insurance producer
members of the Board initially appointed under subparagraph
(B) of paragraph (1), and
``(iii) 1 of the insurer representative members of the
Board initially appointed under subparagraphs (D) and (E) of
paragraph (1),
shall be 1 year, as designated by the President at the time
of the nomination of such members;
``(B) a member of the Board may continue to serve after the
expiration of the term to which such member was appointed
until a successor is qualified; and
``(C) any member of the Board appointed to fill a vacancy
occurring before the expiration of the term for which the
member's predecessor was appointed shall be appointed only
for the remainder of that term.
``(2) Successive terms.--Board members may be reappointed
to successive terms.
``(e) Meetings.--
``(1) In general.--The Board shall meet at the call of the
chairperson, as requested in writing to the chairperson by at
least four members of the Board, or as otherwise provided by
the bylaws of the Association.
``(2) Quorum required.--A majority of directors shall
constitute a quorum.
``(3) Voting.--Decisions of the Board shall require the
approval of a majority of all directors present at a meeting,
a quorum being present.
``SEC. 325. OFFICERS.
``(a) Positions.--The officers of the Association shall
consist of a chairperson and a vice chairperson of the Board,
an executive director, secretary, and treasurer of the
Association, and such other officers and assistant officers
as may be deemed necessary.
``(b) Manner of Selection.--Each officer of the Board and
the Association shall be elected or appointed at such time,
in such manner, and for such terms as may be prescribed in
the bylaws of the Association.
``SEC. 326. BYLAWS, RULES, AND DISCIPLINARY ACTION.
``(a) Adoption and Amendment of Bylaws.--
``(1) Copy required to be filed.--The board of directors of
the Association shall submit to the President and the NAIC
any proposed bylaw or rules of the Association or any
proposed amendment to the bylaws or rules, accompanied by a
concise general statement of the basis and purpose of such
proposal.
``(2) Effective date.--Any proposed bylaw or rule or
proposed amendment to the bylaws or rules shall take effect,
after notice published in the Federal Register and
opportunity for comment, upon such date as the Association
may designate, unless suspended under subsection (c) of
section 330.
``(b) Disciplinary Action by the Association.--
``(1) Specification of charges.--In any proceeding to
determine whether membership shall be denied, suspended,
revoked, or not renewed (hereafter in this section referred
to as a `disciplinary action') or to determine whether a
member of the Association should be placed on probation, the
Association shall bring specific charges, notify such member
of such charges, give the member an opportunity to defend
against the charges, and keep a record.
[[Page H1074]]
``(2) Supporting statement.--A determination to take
disciplinary action shall be supported by a statement setting
forth--
``(A) any act or practice in which such member has been
found to have been engaged;
``(B) the specific provision of this subtitle, the rules or
regulations under this subtitle, or the rules of the
Association which any such act or practice is deemed to
violate; and
``(C) the sanction imposed and the reason for such
sanction.
``SEC. 327. POWERS.
``In addition to all the powers conferred upon a nonprofit
corporation by the District of Columbia Nonprofit Corporation
Act, the Association shall have the following powers:
``(1) To establish and collect such membership fees as the
Association finds necessary to impose to cover the costs of
its operations.
``(2) To adopt, amend, and repeal bylaws and rules
governing the conduct of Association business and performance
of its duties.
``(3) To establish procedures for providing notice and
opportunity for comment pursuant to section 326(a).
``(4) To enter into and perform such agreements as
necessary to carry out its duties.
``(5) To hire employees, professionals or specialists, and
elect or appoint officers, and to fix their compensation,
define their duties and give them appropriate authority to
carry out the purposes of this subtitle, and determine their
qualification; and to establish the Association's personnel
policies and programs relating to, among other things,
conflicts of interest, rates of compensation. and
qualifications of personnel.
``(6) To borrow money.
``(7) To secure funding from board member organizations and
other industry associations for such amounts that the
Association determines to be necessary and appropriate to
organize and begin operations of the Association, which shall
be treated as loans to be repaid by the Association with
interest at market rate.
``SEC. 328. REPORT BY ASSOCIATION.
``(a) In General.--As soon as practicable after the close
of each fiscal year, the Association shall submit to the
President and the NAIC a written report regarding the conduct
of its business, and the exercise of the other rights and
powers granted by this subtitle, during such fiscal year.
``(b) Financial Statements.--Each report submitted under
subsection (a) with respect to any fiscal year shall include
financial statements setting forth the financial position of
the Association at the end of such fiscal year and the
results of its operations (including the source and
application of its funds) for such fiscal year.
``SEC. 329. LIABILITY OF THE ASSOCIATION AND THE DIRECTORS,
OFFICERS, AND EMPLOYEES OF THE ASSOCIATION.
``(a) In General.--The Association shall not be deemed to
be an insurer or insurance producer within the meaning of any
State law, rule, regulation, or order regulating or taxing
insurers, insurance producers, or other entities engaged in
the business of insurance, including provisions imposing
premium taxes, regulating insurer solvency or financial
condition, establishing guaranty funds and levying
assessments, or requiring claims settlement practices.
``(b) Liability of Directors, Officers, and Employees.--No
director, officer, or employee of the Association shall be
personally liable to any person for any action taken or
omitted in good faith in any matter within the scope of their
responsibilities in connection with the Association.
``SEC. 330. PRESIDENTIAL OVERSIGHT.
``(a) Removal of Board.--If the President determines that
the Association is acting in a manner contrary to the
interests of the public or the purposes of this subtitle or
has failed to perform its duties under this subtitle, the
President may remove the entire existing Board for the
remainder of the term to which the members of the Board were
appointed and appoint, in accordance with section 324 and
with the advice and consent of the Senate, new members to
fill the vacancies on the Board for the remainder of such
terms.
``(b) Removal of Board Member.--The President may remove a
member of the Board only for neglect of duty or malfeasance
in office.
``(c) Suspension of Rules or Actions.--The President, or a
person designated by the President for such purpose, may
suspend the effectiveness of any rule, or prohibit any
action, of the Association which the President or the
designee determines is contrary to the purposes of this
subtitle.
``SEC. 331. RELATIONSHIP TO STATE LAW.
``(a) Preemption of State Laws.--State laws, regulations,
provisions, or other actions purporting to regulate insurance
producers shall be preempted to the extent provided in
subsection (b).
``(b) Prohibited Actions.--
``(1) In general.--No State shall--
``(A) impede the activities of, take any action against, or
apply any provision of law or regulation arbitrarily or
discriminatorily to, any insurance producer because that
insurance producer or any affiliate plans to become, has
applied to become, or is a member of the Association;
``(B) impose any requirement upon a member of the
Association that it pay fees different from those required to
be paid to that State were it not a member of the
Association;
``(C) impose any continuing education requirements on
nonresident insurance producers; or
``(D) impose any licensing, registration, or appointment
requirements upon any nonresident insurance producer that
sells, solicits, negotiates, effects, procures, delivers,
renews, continues, or binds insurance for commercial property
and casualty risks to an insured with risks located in more
than 1 State, if such nonresident insurance producer is
otherwise licensed as an insurance producer in the State
where the insured maintains its principal place of business
and the contract of insurance insures risks located in that
State.
``(2) States other than a home state.--No State, other than
a member's home State, shall--
``(A) impose any licensing, integrity, personal or
corporate qualifications, education, training, experience,
residency, continuing education, or bonding requirement upon
a member of the Association that is different from the
criteria for membership in the Association or renewal of such
membership;
``(B) impose any requirement upon a member of the
Association that it be licensed, registered, or otherwise
qualified to do business or remain in good standing in such
State, including any requirement that such insurance producer
register as a foreign company with the secretary of state or
equivalent State official; or
``(C) require that a member of the Association submit to a
criminal history record check as a condition of doing
business in such State.
``SEC. 332. COORDINATION WITH OTHER REGULATORS.
``(a) Coordination With State Insurance Regulators.--The
Association may--
``(1) establish a central clearinghouse, or utilize the
NAIC or any other appropriate entity as a central
clearinghouse, through which members of the Association may
pursuant to section 323(e) disclose their intent to operate
in 1 or more States and pay the licensing fees to the
appropriate States; and
``(2) establish a national database for the collection of
regulatory information concerning the activities of insurance
producers or contract with the NAIC or any other entity to
utilize such a database.
``(b) Coordination With the Financial Industry Regulatory
Authority.--The Association shall coordinate with the
Financial Industry Regulatory Authority in order to ease any
administrative burdens that fall on persons that are members
of both associations, consistent with the requirements of
this subtitle and the Federal securities laws.
``SEC. 333. RIGHT OF ACTION.
``(a) Right of Action.--Any person aggrieved by a decision
or action of the Association may, after reasonably exhausting
available avenues for resolution within the Association,
commence a civil action in an appropriate United States
district court, and obtain all appropriate relief.
``(b) Association Interpretations.--In any such action, the
court shall give appropriate weight to the Association's
interpretation of its bylaws and this subtitle.
``SEC. 334. DEFINITIONS.
``For purposes of this subtitle, the following definitions
shall apply:
``(1) Home state.--The term `home State' means the State in
which the insurance producer maintains its principal place of
residence or business and is licensed to act as an insurance
producer.
``(2) Insurance.--The term `insurance' means any product,
other than title insurance, defined or regulated as insurance
by the appropriate State insurance regulatory authority.
``(3) Insurance producer.--The term `insurance producer'
means any insurance agent or broker, excess or surplus lines
broker or agent, insurance consultant, limited insurance
representative, and any other individual or entity that
solicits, negotiates, effects, procures, delivers, renews,
continues or binds policies of insurance or offers advice,
counsel, opinions or services related to insurance.
``(4) State.--The term `State' includes any State, the
District of Columbia, any territory of the United States, and
Puerto Rico, Guam, American Samoa, the Trust Territory of the
Pacific Islands, the Virgin Islands, and the Northern Mariana
Islands.
``(5) State law.--
``(A) In general.--The term `State law' includes all laws,
decisions, rules, regulations, or other State action having
the effect of law, of any State.
``(B) Laws applicable in the district of columbia.--A law
of the United States applicable only to or within the
District of Columbia shall be treated as a State law rather
than a law of the United States.''.
(b) Clerical Amendment.--The table of contents for the
Gramm-Leach-Bliley Act is amended by striking the items
relating to subtitle C of title III and inserting the
following new items:
``Subtitle C--National Association of Registered Agents and Brokers
``Sec. 321. National association of registered agents and brokers.
``Sec. 322. Purpose.
``Sec. 323. Membership.
``Sec. 324. Board of directors.
``Sec. 325. Officers.
``Sec. 326. Bylaws, rules, and disciplinary action.
``Sec. 327. Powers.
``Sec. 328. Report by association.
``Sec. 329. Liability of the association and the directors, officers,
and employees of the association.
[[Page H1075]]
``Sec. 330. Presidential oversight.
``Sec. 331. Relationship to State law.
``Sec. 332. Coordination with other regulators.
``Sec. 333. Judicial review and enforcement.
``Sec. 334. Definitions.''.
SEC. 3. COMPLIANCE PROVISION.
The budgetary effects of this Act, for the purpose of
complying with the Statutory Pay-As-You-Go-Act of 2010, shall
be determined by reference to the latest statement titled
``Budgetary Effects of PAYGO Legislation'' for this Act,
submitted for printing in the Congressional Record by the
Chairman of the Committee on the Budget of the House of
Representatives, provided that such statement has been
submitted prior to the vote on passage.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Georgia (Mr. Scott) and the gentleman from Texas (Mr. Neugebauer) each
will control 20 minutes.
The Chair recognizes the gentleman from Georgia.
General Leave
Mr. SCOTT of Georgia. Mr. Speaker, I ask unanimous consent that all
Members may have 5 legislative days within which to revise and extend
their remarks on this legislation and to insert extraneous material
thereon.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Georgia?
There was no objection.
Mr. SCOTT of Georgia. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, I am pleased to join with my fellow colleagues in
bringing this important legislation to the floor for a vote today. This
legislation is timely since the issue of insurance regulatory reform
has remained crucial for some time now.
I am pleased to introduce H.R. 2554, the National Association of
Registered Agents and Brokers Reform Act, with Congressman Neugebauer
to help guarantee adequate agent broker licensing as well as ensure
increased competition. That is the important word in this, Mr. Speaker,
``increased competition.''
Insurance regulatory reform is an issue many involved agree requires
action, and this bill is a good starting point for leveling the playing
field for insurance agents and brokers. H.R. 2554 would simply
establish the National Association of Registered Agents and Brokers to
provide for nonresident insurance agent and broker licensing while
preserving the rights of States to supervise and discipline insurance
agents and brokers.
This legislation will benefit consumers through increased competition
among agents and brokers, leading to greater consumer choice. This
legislation is straightforward. Insurance agents and brokers who are
licensed in good standing in their home States can apply for membership
to the National Association of Registered Agents and Brokers, which we
call NARAB. This will allow them to operate in multiple States.
Membership will be voluntary and will not affect the rights of a
nonmember producer under any State license.
This legislation will benefit policyholders by increasing marketplace
competition and consumer choice by enabling insurance producers to more
quickly and responsibly serve the needs of consumers. A private
nonprofit NARAB entity consisting of State insurance regulators and
marketplace representatives will serve as a portal for agents and
brokers to obtain nonresident licenses in additional States. This is
provided that they pay the required State nonresident licensing fees
and that they meet the NARAB standard for membership.
This bill also would establish membership criteria which would
include standards for personal qualifications, education, training, and
experience. And further, member applicants would be required to undergo
a national criminal background check.
This very important bill clarifies current State consumer protection,
and market conduct regulation would be preserved. NARAB board members
would include a narrow majority of State insurance regulators. All
bylaws and reports of the association will be filed with the National
Association of Insurance Commissioners. This legislation directs the
NARAB board to consider utilizing the NAIC as the entity that the
association will collaborate with on a central clearinghouse and a
national database for regulatory information. NARAB would not be a part
of nor would be required to report to any Federal agency, nor would it
have any Federal regulatory power.
Congress endorsed this concept through its passage of the Gramm-
Leach-Bliley Act in 1999, which would have created NARAB if a number of
States did not reach a certain level of licensing reciprocity. At that
time, enough reciprocity was provided to avoid the creation of NARAB,
but it has become clear that follow-up legislation is necessary.
So my bill addresses market entry procedures only, and it would not
impact the daily regulation of insurance. Insurance agents would still
be subject to the consumer protection laws of each of the States. This
legislation passed in the 110th Congress by a voice vote, but this
version has some important improvements. Among these improvements,
sections have been added to ensure that State regulators are notified
when a producer becomes a NARAB member, becomes authorized to operate
in new States, or a membership is suspended or revoked. Also, this
version makes revisions concerning NARAB's board of directors to
clarify certain provisions, namely, that the President would formally
make the appointments, and references to private-sector trade
associations are eliminated.
Again, I want to thank my Republican colleague, Congressman
Neugebauer, for his work on this legislation. He has done an excellent
job, and I have enjoyed working with him. I urge its passage in the
House once again.
Congress of the United States,
Committee on the Judiciary,
Washington, DC, March 2, 2010.
Hon. Barney Frank,
Chairman, Committee on Financial Services, House of
Representatives,
Washington, DC.
Dear Chairman Frank: This is to advise you that, as a
result of your having consulted with us on provisions in H.R.
2554, the National Association of Registered Agents and
Brokers Reform Act of 2009, that fall within the rule X
jurisdiction of the Committee on the Judiciary, we are able
to agree to discharging our committee from further
consideration of the bill in order that it may proceed
without delay to the House floor for consideration.
The Judiciary Committee takes this action with our mutual
understanding that by foregoing consideration of H.R. 2554 at
this time, we do not waive any jurisdiction over subject
matter contained in this or similar legislation, and that our
Committee will be appropriately consulted and involved as the
bill or similar legislation moves forward, so that we may
address any remaining issues in our jurisdiction. Our
Committee also reserves the right to seek appointment of an
appropriate number of conferees to any House-Senate
conference involving this or similar legislation, and
requests your support for any such request.
I would appreciate your including this letter in the
Congressional Record during consideration of the bill on the
House floor. Thank you for your attention to this request,
and for the cooperative relationship between our two
committees.
Sincerely,
John Conyers, Jr.,
Chairman.
____
Committee on Financial Services,
Washington, DC, March 2, 2010.
Hon. John Conyers,
Chairman, Committee on the Judiciary,
House of Representatives, Washington, DC.
Dear Chairman Conyers: Thank you for your letter concerning
H.R. 2554, the ``National Association of Registered Agents
and Brokers Reform Act of 2009.'' This bill will be
considered by the House shortly.
I want to confirm our mutual understanding with respect to
the consideration of this bill. I acknowledge that portions
of the bill fall within the jurisdiction of the Committee on
the Judiciary and I appreciate your cooperation in moving the
bill to the House floor expeditiously. I further agree that
your decision to not to proceed with a markup on this bill
will not prejudice the Committee on the Judiciary with
respect to its prerogatives on this or similar legislation. I
would support your request for an appropriate number of
conferees in the event of a House-Senate conference.
I will include a copy of this letter and your response in
the Congressional Record. Thank you again for your
cooperation.
Barney Frank,
Chairman.
Mr. Speaker, I reserve the balance of my time.
Mr. NEUGEBAUER. Mr. Speaker, I rise today in support of H.R. 2554,
and I also want to thank my colleague from Georgia (Mr. Scott) for his
leadership on this legislation.
We introduced this legislation almost 1 year ago with strong
bipartisan support. Mr. Scott has worked with the
[[Page H1076]]
House leadership to help get this bill to the floor today, and I
certainly appreciate his efforts.
This bill sets up a private nonprofit insurance system that will help
insurance agents and brokers do business across State lines more
efficiently. Not only does this help reduce regulatory burden for
agents, but it also helps consumers by giving them more choices.
At its core, this is really a small business bill. Most insurance
agents and brokers are independent small businesses; they don't have a
lot of employees. So when they have to file paperwork for multiple
States in order to do business across State lines, that only adds more
cost for their compliance. Under this bill, they can register with the
new National Association of Registered Agents and Brokers, NARAB, and
that will serve as a portal for them to be licensed more easily in
other States.
In today's economy, this bill makes sense for small businesses. If a
customer moves to another State but wants to keep his insurance agent
that has worked for him for years, this bill will streamline the
process for that agent to be licensed in other States. If a customer
wants that agent's trust to help them with policies for an elderly
parent that they are caring for who lives in another State, this bill
also makes that feasible.
H.R. 2554 provides a way to streamline insurance agent licensing
across State lines without creating a new government bureaucracy, with
no cost to the taxpayers, with consistent consumer protections, and
without new mandates on States. This bill empowers insurance agents and
their customers without making the government bigger or more expensive.
The option for NARAB was first included in the 1999 Gramm-Leach-
Bliley Act, but the bar was not set high enough. Congress realized that
in 2008 when the House passed this legislation by voice vote. While the
Senate did not take up the bill last time, my hope is that broad
bipartisan support in the House again will move this much-needed bill
forward.
We've had a lot of debate and discussion in the Financial Services
Committee about the big picture for insurance regulation. There are a
lot of perspectives on that issue. The good news about this bill,
however, is that this is one insurance reform that we can all agree on.
I urge my colleagues to support this bill. It's good for small
businesses, it's good for our community agents, and it's good for the
customers that they serve.
I also again want to thank Mr. Scott for his cooperation and this
bipartisan bill, and I urge my colleagues to support H.R. 2554.
I yield back the balance of my time.
Mr. SCOTT of Georgia. In closing, Mr. Speaker, let me again thank my
colleague, Congressman Neugebauer, for his distinguished work on this.
It has been a pleasure.
Again, as he articulated eloquently a few minutes ago, the two things
that this bill really does is it helps American consumers by increasing
competition in the marketplace--that is really what we need as we deal
with the very topical issue of insurance. And it provides the American
people, the American consumer, with choice. So competition and choice
are certainly the great beneficiaries of this legislation.
I might add that our act has garnered support from both sides of the
aisle. We have both Democrats and Republicans working together on this.
Forty-eight of us are sponsors to this bill, and 27 of us belong to the
Financial Services Committee, where we have done work on it.
{time} 1745
This bill has the support of NAIC, as I said earlier. It shows that
the State insurance regulators, themselves, believe that this type of
legislation has needed reform. In addition, the Independent Insurance
Agents and Brokers of America supports this bill. The National
Association of Insurance and Financial Advisors supports the bill. The
National Association of Mutual Insurance Companies, the Property
Casualty Insurance Association of America, the Council of Insurance
Agents and Brokers, as well as a number of individual insurance
companies, all are in support of this bill.
I am proud to have had an opportunity to work with and to have
brought this bill before the House. I ask, certainly, for favorable
support.
I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Georgia (Mr. Scott) that the House suspend the rules and
pass the bill, H.R. 2554, as amended.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill, as amended, was passed.
A motion to reconsider was laid on the table.
____________________