The National Council of Insurance Legislators (NCOIL) unanimously approved a "Resolution Supporting Independent Contractor Status for Insurance Agents and Other Licensed Financial Professionals" at its Spring Meeting in Las Vegas. The resolution, sponsored by NCOIL President and California Assemblyman Ken Cooley states that "NCOIL will encourage states and federal entities that are debating worker classification policies and that are considering adopting a strict ABC Test and or other similarly worker classification laws to continue issuing exemptions for, or exempting out, licensed insurance agents and other financial professionals."
Recently the independent contractor employment model utilized by many in the insurance and financial services industry has been challenged on federal and state levels by efforts to redefine who is considered an employee. Many efforts aim to reclassify who is viewed as an employee by utilizing the strict "ABC" policy, as was seen in the Federal Legislation of the Protecting the Right to Organize (PRO) Act. However, the insurance and financial services industry is not the primary target. The proposals are intended to address employment practices of gig economy industries that almost exclusively utilize independent contractors. NAIFA has advocated strongly against including independent insurance agents and other financial professionals in these efforts.
NCOIL has held several discussion panels on the topic, including presentations at the NCOIL 2021 Summer Meeting in Boston from NAIFA-MA President Josh O'Gara, CLU, ChFC, CFP, and NAIFA Policy Director Maeghan Gale. O'Gara and Gale provided the producers' perspective and discussed the importance of independent contractor status for independent broker-dealers and independent financial advisors. Additionally, the resolution cites work presented by NAIFA, stating that "surveys, including research by the National Association of Insurance and Financial Advisors (NAIFA), show licensed independent agents and other financial services professionals are overwhelmingly satisfied with their status as independent contractors and oppose policies that would take away their choice to work independently."
NAIFA strongly supports the adoption of the resolution and applauds NCOIL's commitment to providing a platform to address this important issue. NAIFA hopes that this resolution will influence states and the federal government to exempt insurance and financial professionals from laws or regulations that include an ABC test or similar methods to determine whether a worker is classified as a contractor or employee.