A number of states have enacted laws or regulations that permit financial advisors to receive some continuing education (CE) credit for their active membership and participation in a professional agent trade association subject to the approval of the state insurance department.
NAIFA supports legislation that would permit insurance producers to receive CE credit for their membership in a professional insurance association. Professional insurance associations, like NAIFA, promote high standards of ethical conduct among their members and provide educational programs and professional development opportunities to association members. We believe that state proposals to allow advisors to receive some CE credit for association membership could encourage financial advisors to become members of professional insurance associations, which would ultimately benefit consumers by providing access to better qualified advisors.
NAIFA developed its own model state legislation that would allow financial advisors to receive some CE credit for actively participating as members of professional insurance associations, subject to approval of state insurance commissioners. The NAIFA model legislation would allow for financial advisors to receive up to four hours of CE credit per reporting period for membership in a professional insurance association. Under the NAIFA model, members must demonstrate active participation in the association to qualify for such CE credit. The NAIFA model gives authority to state insurance commissioners to define the term “active participation," specify the associations where membership would be eligible for CE credit, and require any other criteria the commissioners may deem necessary. The NAIFA model legislation is based on laws already enacted in some states.
Concerns have been raised that senior citizens were being misled and harmed by the use of certain designations and certifications by insurance agents and advisors that may imply a level of expertise regarding senior affairs that did not exist. In addition to being harmful to consumers, these types of allegations are potentially damaging to NAIFA members because they could affect the reputation of all agents and advisors and could compromise the public’s trust in insurance professionals.
In 2008, both the National Association of Insurance Commissioners (NAIC) and the North American Securities Administrators Association (NASAA) adopted model regulations designed to prevent the misleading use of senior-specific designations and certifications. The NAIC also adopted an Insurer and Producer Bulletin and Consumer Alert to help guide insurers/producers and assist consumers with respect to the appropriate use of senior designations.
Neither model references specific designations as being approved or disapproved; rather, individual designations will be measured against the standards set out in the model regulation, which essentially prohibit the use of designations that have not been legitimately earned, are nonexistent, or misrepresent a level of expertise or education that does not exist.
The models also establish a safe harbor for designations that are not primarily sales or marketing oriented and are issued or accredited by the American National Standards Institute, the National Commission for Certifying Agencies, or an institution of higher education.
The NAIC model applies to the sale of insurance-related products; the NASAA rule covers sales of securities and other investment-oriented products. If both models were to be adopted by a state, the state would have a consistent regulatory program in place to address the use of senior-specific designations in the marketing of both insurance and investment products.
NAIFA has been engaged in this issue since 2007, meeting with staff and key members of the Senate Aging Committee, the NAIC, NASAA, and the National Conference of Insurance Legislators. NAIFA staff testified at NAIC National Meetings and worked closely with the NAIC during the development of the NAIC model. NAIFA also filed comment letters with the NAIC, NASAA, and the Senate Aging Committee regarding draft legislation, rules, and bulletins.
NAIFA supports the NAIC and NASAA models. In 2012, NAIFA played an instrumental role in the adoption by NCOIL of a resolution urging state regulators to adopt the NAIC and NASAA models. NAIFA state associations have been involved in efforts to have these models adopted in the various states.
To date, the current version of the NAIC and/or NASAA model regulations governing the use of senior designations have been adopted by over 35 states, and several other states have chosen alternate approaches for regulating the use of designations.
In 2017, the NAIC formed the Promoting Appropriate Sales Practices in Life Insurance and Annuities Working Group for the purpose of reviewing the current NAIC model rule, Insurer and Producer Bulletin, and Consumer Alert to determine if revisions to these documents are necessary. NAIFA is participating in the ongoing activities of this working group.