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Producer Licensing


Last Updated: 2/1/2023
Issue: Over the past 15 years, state insurance regulators have made great strides in streamlining the producer-licensing process and advances in technology have eliminated many of the hurdles. On Jan. 12, 2015, the National Association of Registered Agents and Brokers Reform Act of 2015 (or NARAB II as it is commonly called) was enacted as part of H.R.26, the Terrorism Risk Insurance Program Reauthorization Act of 2015. The Act requires the establishment of a national clearinghouse to streamline market access for nonresident insurance producers.

The establishment of a National Association of Registered Agents and Brokers (NARAB) is a significant step to help simplify insurance producer licensing in the United States. The NAIC supported the creation of a NARAB as it would create a one stop mechanism for accessing nonresident markets while preserving important state market regulatory authorities and consumer protections.

Background: 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 236,000 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.

Historically, each state had its own licensing requirements. A producer licensed in one state generally had to meet the separate nonresident licensing requirements in other states in order to sell, solicit or negotiate insurance in such other states. 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 nonresident 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 nonresident 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 states comply with GLBA's reciprocity provisions. Subsequently, the NAIC membership determined 35 jurisdictions had met the nonresident producer licensing reciprocity requirements under GLBA and, as a result, the GLBA version of NARAB was not created.

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., Puerto Rico, and the U.S. Virgin Islands.

While much progress has been made to improve uniformity and streamline nonresident 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. This led to renewed calls for NARAB and new versions of the bill have been introduced various times in the U.S. Congress over the past 15 years.

In early 2015, a modified version of the national licensing proposal, the National Association of Registered Agents and Brokers Reform Act of 2015 (or NARAB II), was enacted and signed into legislation by President Obama on Jan. 12, 2015. NARAB will act as a central clearinghouse allowing an insurance producer licensed in his/her home state to sell, solicit or negotiate in every other state in which the producer intends to do business, provided the producer is licensed for those lines of business in his/ her home state and pays the state’s licensing fee.

NARAB II is intended to streamline the non-resident producer licensing process and preserve the states’ ability to protect consumers and regulate producer conduct.  NARAB II does not create a federal regulator but establishes an independent non-profit corporation, known as NARAB, controlled by its Board of Directors. The stated purpose of the legislation is to provide “a mechanism through which licensing, continuing education, and other nonresident insurance producer qualification requirements and conditions may be adopted and applied on a multi-state basis without affecting the laws, rules, and regulations, and preserving the rights of a State, pertaining to” certain specific producer-related conduct.

The NARAB is to be governed by a 13-member governing board comprised of eight current or former state insurance commissioners and five insurance industry representatives (subject to Presidential appointment and Senate confirmation). On Jan. 11, 2016 then President Obama nominated four individuals to the NARAB board:  Raymond Farmer, South Carolina Department of Insurance Director; Mike Rothman, Minnesota Department of Commerce Commissioner; along with two executives at insurance brokerages. Adding to the list, President Obama nominated past Missouri Insurance Director John Huff for the board of directors in July 2016. The NARAB, acting through its Board, will establish membership criteria, through which producers can obtain nonresident authority to sell, solicit or negotiate insurance.

To become a member of NARAB, an insurance producer must be licensed in his/her home state, not have an active license suspension or revocation in place at the time of application, successfully pass a criminal background check and pay membership fees. Once NARAB accepts the membership application from a qualified producer, the producer is authorized to engage in producer activities (i.e., the sale, solicitation, and negotiation of insurance) in that jurisdiction, provided the producer is licensed for those lines of business in his/her home state and pays the state’s licensing fee. The law also requires NARAB to establish continuing education (CE) requirements as a condition of membership. Membership and participation in NARAB is entirely optional and voluntary; producers are not required to become NARAB members.

NARAB is granted some disciplinary enforcement powers. However, state regulators will continue to regulate marketplace conduct, oversee the actions of producers, investigate complaints, protect consumers, and take action against those who violate the law. The provisions of the bill take effect on the later of: 1) the expiration of the two-year period beginning on the day of the enactment of NARAB; or 2) once NARAB is incorporated.

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


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.

In 2009, the NAIC membership established reciprocity criteria that represents a more detailed analysis of certain aspects of the original 2020 reciprocity standard as well as issues not included in the 2002 report. In October of 2011, the NAIC’s NARAB (EX) Working Group recommended 40 jurisdictions be certified for reciprocity.


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