Legislation that would allow RIAs to sell annuities in multiple states has never been closer to passage.
That, at least, is according to Lee Covington, general counsel for the Insured Retirement Institute.
The National Association of Registered Agents and Brokers Act (NARAB II) would establish an insurance licensing clearinghouse for financial professionals operating in multiple states.
Advisors now working in multiple states must maintain state insurance licenses across multiple jurisdictions, creating any number of regulatory obstacles.
The Senate passed NARAB II legislation in January, as part of a flood insurance bill.
The House had previously passed standalone NARAB II legislation, but passed its own version of a flood bill, meaning the Senate version will have to be added on to new legislation, potentially the terrorism risk insurance program. The House Financial Services Committees recently added NARAB II to its reauthorization of the terrorism insurance bill.
“It’s clear that there is unprecedented momentum and support for moving NARAB II forward this year,” Covington said in an address at the IRI Government, Legal and Regulatory Conference today.
IRI’s research shows that the regulatory burdens on retirement advisors could be hurting their ability to offer their clients lifetime income products.
This year, an IRI survey found that 43 percent of the investors it surveyed are considering moving to another state for retirement. A separate IRI survey found that three in four baby boomers would prefer to continue to work with their existing advisor if they were to move to another state.
“NARAB II would ensure that these clients could continue to work with their financial professionals and still have access to a full suite of lifetime income strategies, without forcing the advisor to overcome the burden of redundant insurance licensing requirements,” Covington said in prepared comments. “NARAB II will help ensure that financial professionals can focus more on meeting their clients’ needs. Now is the time to get this done.”