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Flood insurance delays, NARAB has been approved by Senate!

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Despite opposition from portions of the insurance industry, the Senate chose to go ahead with a bill that would effectively delay massive flood insurance premium hikes, for four years. The legislation is should benefit thousands of home and business owners if passed by the more reserved House of Representatives.

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The 67-32 vote approved a version of the bill without a proposed amendment, that would have capped rate increases at 25% per year until the premium reflected FEMA’s actuarial pricing.

A provision establishing the National Association of Registered Agents and Brokers (NARAB) has also survived significant alterations in its passage. NARAB will establish a federal and state run board that allows for independent insurance producers to apply for multi-state licensing.

Joel Wood, the senior vice president of government relations at the Council of Insurance Agents and Brokers, has stressed that the bill’s passage does not mean that producers will be required to obtain a license through NARAB in order to assist clients in multiple states.

“Nothing compels you to go to NARAB. It’s completely optional,” Wood told Insurance Business. “If you want to be licensed to sell insurance in 40 different jurisdictions, you’re free to do that on a state-by-state basis. Honestly, I think in some places, that will be the most attractive option.”

The National Association of Insurance and Financial Advisors (NAIFA) President John Nichols has also greeted the news cheerfully, commenting:

“Senate passage of NARAB II is a win for insurance agents and brokers, but more importantly it’s a win for consumers. Relationships forged between agents and their clients are important and often last for decades. These relationships are built on trust, consumer confidence, and superior service. They shouldn’t have to end simply because a client moves to a different state. Under the bill, if your agent is a NARAB member and you move to another state, then you can keep your agent.”

NAIFA also added that a survey of its members revealed they're spending an average of 29 hours annually complying with insurance licensing requirements, and spending $350 on insurance-specific continuing education courses.

Sourch: Insurance Business America - "Flood insurance delays, NARAB approve by Senate"

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