Producer Licensing and NARAB II
Last Updated: 11/25/14

People who wish to sell, solicit or negotiate insurance in the United States must be licensed as a "producer". The term producer includes insurance agents and insurance brokers. Producers must comply with various state laws and regulations governing their activities. There are currently more than 2 million individuals and more than 500,000 business entities licensed to provide insurance services in the United States. State insurance departments oversee producer activities as part of a comprehensive regulatory framework designed to protect insurance consumer interests in insurance transactions.

Traditionally, each state had its own licensing requirements. Producers licensed in one state generally had to meet the separate licensing requirements for each state in which they wanted to sell insurance. As licensing requirements varied from state to state, producers had to submit the same (or similar) information each time but in different formats or different information, depending on each state's requirements. This imposed significant time and monetary costs on producers, their affiliated agencies and each state insurance department.

A provision in the federal Gramm-Leach-Bliley Act of 1999 (GLBA) sought to streamline producer licensing by requiring the states to enact certain reforms to the insurance producer-licensing process. The provision was designed to create a new organization called the National Association of Registered Agents and Brokers (NARAB) if greater state producer-licensing uniformity or reciprocity was not achieved (the federal statute required at least 29 jurisdictions to achieve either reciprocity or uniformity in non-resident producer licensing by November 2002). The GLBA enactment sparked a nationwide movement to implement sweeping reforms to simplify and bring more efficiency to the producer-licensing process.

After many discussions, state insurance regulators opted to pursue reciprocity among the states for non-resident agent licensing first, followed by actions to improve uniformity in the producer licensing process. In December 1999, the NAIC created the NARAB Working Group to help the states implement the requirements of GLBA. Consistent with the NARAB requirements, the NAIC adopted the Producer Licensing Model Act (#218) in February 2000 to help the states comply with GLBA's reciprocity provisions. Subsequently, the NAIC membership determined 35 jurisdictions1 had met the non-resident producer licensing reciprocity requirements under GLBA and, as a result, NARAB was never created.

In 2007, the NAIC identified producer-licensing reform as one of the NAIC's key strategic issues and conducted a national producer-licensing assessment to evaluate compliance with the reciprocity and uniformity provisions of GLBA. Following the assessment, the NAIC published the "Producer Licensing Assessment Aggregate Report of Findings" in February 2008. The report found all 35 states previously certified by the NARAB Working Group remained in compliance with the 2002 reciprocity standards. The report also found additional jurisdictions were eligible for certification.

Long before GLBA, the NAIC initiated several efforts to make producer licensing more uniform. The National Insurance Producer Registry (NIPR) was established by the NAIC as a non-profit affiliate in 1996 to develop and operate as a national repository for producer-licensing information. NIPR is part of an ongoing effort to streamline and modernize the various processes involved with producer licensing. It is an electronic system that tracks ongoing licensing changes from state to state. Currently, NIPR receives data from all 50 states, Puerto Rico and the District of Columbia.

While much progress has been made to improve uniformity and streamline non-resident producer licensing, there has been concern the envisioned uniformity and reciprocity was never fully achieved as there remain several large states that have not yet become reciprocal. The absence of these major markets has inhibited the implementation of national licensing reciprocity and the ability of agents to obtain licenses in all of the states.

A modified version of the national licensing proposal, the National Association of Registered Agents and Brokers Reform Act (or NARAB II as it is being commonly called), is pending before Congress. In July 2014, the Senate passed the Terrorism Risk Insurance Program Reauthorization Act of 2014 (S.2244) which includes added legislation for creating NARAB II. NARAB II would 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 would retain their regulatory authority over consumer protection, market conduct and unfair trade practices. The states also would retain their rights over resident licensing, as well as supervision, discipline and the establishment of licensing fees for insurance producers.

The NAIC will continue to work in the 113th Congress to ensure that any version of this legislation preservers state authority and consumer protection. The NAIC has undertaken a number of initiatives designed to streamline producer licensing and continues to enhance its reciprocity framework. The NAIC remains committed to improving producer licensing and will continue to work toward non-resident licensing reciprocity in all states consistent with the GLBA. The Producer Licensing (EX) Task Force is currently charged to: develop and implement uniform standards, interpretations and treatment of producer and adjuster licensees and licensing terminology; monitor and respond to developments related to licensing reciprocity; coordinate with industry and consumer groups regarding priorities for licensing reforms; and coordinate and consult with the NIPR Board of Directors to develop and implement uniform producer licensing initiatives, with a primary emphasis on encouraging the use of electronic technology.

  1. This number was subsequently expanded to 47 jurisdictions as a result of additional jurisdictions satisfying the reciprocity criteria.


Committees Active on This Topic
Producer Licensing (EX) Task Force
New Releases

NAIC Statement on TRIA Reauthorization

NAIC Testifies Before Congress In Support of Streamlined Producer Licensing Legislation

NIPR 2010 Annual Report Highlights Producer Licensing Advancements

NAIC Completes Comprehensive Producer-Licensing Assessment
Testimony and Speeches
NAIC Letter to House in Support of NARAB II (H.R. 1155)

Testimony Before the Subcommittees on Securities, Insurance, and Investment Committee on Banking, Housing, and Urban Affairs Regarding: The National Association of Registered Agents and Brokers Reform Act of 2013

Additional Resources
NARAB Legislative Issues Brief
NAIC Producer Licensing Assessment Aggregate Report of Findings
National Insurance Producer Registry (NIPR) Website

History and Framework of Producer Licensing
May 2014, E-Reg Presentation

Producer Licensing and NARAB II
April 2012, CIPR Newsletter
Media queries should be directed to the NAIC Communications Division at 816-783-8909 or

Tim Mullen
Director Market Regulation
Phone: 816-783-8260

John Bauer
Chief Counsel, Regulatory Affairs
Phone: 816-783-8036

NAIC Center for Insurance Policy and Research (CIPR)

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