The US Senate has passed the annual National Defense Authorization Act (NDAA), exempting insurance agents from a provision that could have subjected insurance professionals to unnecessary red tape.
The NDAA provision would require almost every small business with fewer than 20 employees to file new reports on its beneficial ownership with the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN). Under the new requirement, businesses would have to comply with the reporting requirement within two years of the NDAA’s enactment, or upon incorporation of the business.
There will be penalties for those businesses that fail to comply with the new rule, with civil penalties of up to $10,000 and criminal penalties of up to two years in prison.
But the Senate has exempted insurance agents and brokers from the new federal reporting requirement – a move that the industry has praised.
“As the only producer group that advocated to exclude agents and brokers from having to provide small business beneficial ownership information to the federal government, the Big ‘I’ is grateful that the Senate voted to pass the NDAA conference report with an exemption for insurance agents and brokers from those burdensome requirements,” said Independent Insurance Agents & Brokers of America (Big ‘I’) senior vice president of external, industry and government affairs Charles Symington in a statement.
Symington added that the Big ‘I’ is especially pleased that the provision had “significant bipartisan support” in both the House and the Senate.
During the NDAA conference report, the Big ‘I’ argued to include a full exemption from the provision for agents and brokers. The insurance association maintained that insurance producers already provide beneficial ownership information to state regulators, and that it would be “duplicative and unnecessary” to force producers to submit information again to the federal government.