Financial advisors who sell insurance should be able to register in more than one state at the same time by mid-2016, predicted lobbyists after the U.S. Senate passed a measure establishing a multi-state licensing system for financial professionals.
The creation of the National Association of Registered Agents and Brokers is part of a bill re-enacting the Terrorism Risk Insurance Program, passed by the Senate Thursday afternoon 93-4. It is now on its way to the president’s desk.
While the Obama administration has not come out with a position on the legislation, heavy Democratic congressional support virtually ensures his signature.
One benefit of the bill for financial advisors is that it will make it easier to sell annuities to clients who move out of state.
Lee Covington, an executive at the Insured Retirement Institute, an annuities industry trade group, told Financial Advisor that advisors can probably expect to be able to register in several states simultaneously within a year and a half.
Covington noted the groundwork has been laid to beat the two-year deadline for multi-state registration in the law.
“We’re not starting from scratch,” he said. “We have the model state rules in place. We have the technology in place to make the states’ license registrations conform with each other. People are eager to have NARAB become operational.”
Factors that could accelerate or slow down the start include the speed at which the Senate confirms board members and the board’s seed work, he noted.
NARAB will consist of 13 members appointed by the president with the advice and consent of the Senate. Five members will be representatives of the insurance industry. Political affiliation is not a criterion for their selection, according to the legislation.
However, the remaining eight members, past and present state insurance commissioners, must be divided equally between Democrats and Republicans.