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Transcript of © AMERICAN COUNCIL OF LIFE INSURERS 101 Constitution Ave., NW, Washington, DC 20001-2133...
© AMERICAN COUNCIL OF LIFE INSURERS101 Constitution Ave., NW, Washington, DC 20001-2133
Chronologically Challenged Identification: Senior DesignationsJames Odland, Vice President & Managing CounselThrivent Financial for Lutherans
David Leifer, ACLI
ACLI Compliance and Legal SectionAnnual MeetingBoston, MassachusettsJuly 22, 2009
© AMERICAN COUNCIL OF LIFE INSURERS101 Constitution Ave., NW, Washington, DC 20001-2133
Comprehensive Designation Timeline (1927-2008)
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1934
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1948
1955
1962
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s1927: 3 designations
1987: 63 designations
2008:
Confusion Around the “Alphabet Soup” of Designations
THE AMERICAN COLLEGE
© AMERICAN COUNCIL OF LIFE INSURERS101 Constitution Ave., NW, Washington, DC 20001-2133
Scrutiny of Financial Professional Credentials
Media focus on senior financial abuse
“Motel” Designations Requirements for
designations vary enormously
The fact is, consumers are impressed by credentials
© AMERICAN COUNCIL OF LIFE INSURERS101 Constitution Ave., NW, Washington, DC 20001-2133
Regulatory Background (Banks)Nebraska Dept. of Banking and Finance, Interpretive Opinion No. 26 July 31, 2007
Prohibited use (business cards, stationary, advertising, etc.) of designations other than those specifically accepted by the Dept.
15 Designations listed
Applied only to Broker-Dealers and Investment Advisors
Massachusetts, New Hampshire, Virginia and Washington Banking Regulators developed similar approach
© AMERICAN COUNCIL OF LIFE INSURERS101 Constitution Ave., NW, Washington, DC 20001-2133
State Insurance Actions
Iowa Bulletin 07-05 (Sept. 7, 2007) List of “Approved” Designations Dept. to prospectively review
designations Producers not prohibited from
using unapproved designations (unlike banking approach)
Insurers specifically held responsible for Producer Designations
© AMERICAN COUNCIL OF LIFE INSURERS101 Constitution Ave., NW, Washington, DC 20001-2133
Kansas Bulletin (Sept. 26, 2007) Focused on CSA Designation
(Certified Senior Advisor) Mandates use of CSA Disclosure Remind Producers they may be
violating state law by representing more than their license bestows
State Insurance Actions
© AMERICAN COUNCIL OF LIFE INSURERS101 Constitution Ave., NW, Washington, DC 20001-2133
Insurer Concerns
Pre-approval of designations would be cumbersome and difficult to administer
If every state developed its own list this would become impossible
Limited effectiveness as designations proliferate
Insurer liability for producer actions
© AMERICAN COUNCIL OF LIFE INSURERS101 Constitution Ave., NW, Washington, DC 20001-2133
NAIC Initial Activities
Insurer and Producer Bulletin (April 2008)
States that NAIC advertisements of Life Insurance & Annuities Model Regulation applies to Designations if utilized in an advertisement – In this case insurer is responsible
Warns producers not to use designations unsupported by a documented program of study
© AMERICAN COUNCIL OF LIFE INSURERS101 Constitution Ave., NW, Washington, DC 20001-2133
NAIC Initial Activities
Seniors Beware – Consumer Alert Regarding Credentials
Also approved Spring 2008
Beware “Free Lunch” Seminars
Question Credentials
Other Consumer Tips
© AMERICAN COUNCIL OF LIFE INSURERS101 Constitution Ave., NW, Washington, DC 20001-2133
NAIC Model Reg on the Use of Senior Specific Certifications and Professional Designations
Establishes a standard of whether the use of a particular designation indicates or implies, in a way that misleads the consumer, that the agent has special certification or training in advising seniors
Creates what is essentially a safe harbor for designations that:
are not primarily sales/marketing oriented and
are issued/accredited by the American National Standards Institute, the National Commission for Certifying Agencies, or an institution of higher education
© AMERICAN COUNCIL OF LIFE INSURERS101 Constitution Ave., NW, Washington, DC 20001-2133
NAIC Model Reg on the Use of Senior Specific Certifications and Professional Designations
Expressly prohibits the use of designations that have not been legitimately earned, that are nonexistent, or that misrepresent a level of expertise or education that does not exist
Exceptions for job titles and areas of specialization
Flag terms such as “senior”, “retirement”, “elder”, certified, “planner”, etc.
© AMERICAN COUNCIL OF LIFE INSURERS101 Constitution Ave., NW, Washington, DC 20001-2133
Modeled after NASAA rule on the use of senior designations
NASAA rule adopted in 13 states, proposed in 5 states
Approved by NAIC in an expedited manner
Supported by ACLI, NAIFA, AARP, and The American College
Adopted in 4 states, proposed in 9 states
NAIC Model Reg on the Use of Senior Specific Certifications and Professional Designations
© AMERICAN COUNCIL OF LIFE INSURERS101 Constitution Ave., NW, Washington, DC 20001-2133
California – Return to a list-based approach – A. 2150
Pre-approval by the Commissioner
Approval of both educational topics and hours
Must concurrently display CA license # in any writing that includes a designation
Must be licensed to sell products 4 years prior to use
© AMERICAN COUNCIL OF LIFE INSURERS101 Constitution Ave., NW, Washington, DC 20001-2133
California – Return to a list-based approach
Also Fl law (S. 2082) applies to all designations, not just senior-focused
May not use a designation or title in such a way as to “falsely imply” specialized financial knowledge
CFP, CLU, ChFC, LUTC & securities licenses excepted
© AMERICAN COUNCIL OF LIFE INSURERS101 Constitution Ave., NW, Washington, DC 20001-2133
Agent Credentialing ... Federal
Senate - Senior Protection Legislation 2008
On April 1, 2008, Senator Herb Kohl, (D-
WI), Chairman of the Special Aging Committee introduced S. 2794, the “Senior Investor Protection Act of 2008”
The legislation would have established a program of grants to states to investigate and prosecute misleading and fraudulent marketing practices and develop educational materials and training aimed at reducing misleading and fraudulent marketing of financial products (including insurance/annuity products) toward seniors
© AMERICAN COUNCIL OF LIFE INSURERS101 Constitution Ave., NW, Washington, DC 20001-2133
Agent Credentialing ... Federal
Senate - Senior Protection Legislation 2008
Neither the Senate Judiciary or Aging Committee’s took action on this legislation last year
Aimed to encourage state regulators to adopt a uniform standard for the accreditation of senior financial advisors and to assist states in their efforts to protect seniors from being duped by misleading destinations
Industry supported the limits on use of designations, but had concerns with the lack of recognitions for state regulation of suitability and disclosure
© AMERICAN COUNCIL OF LIFE INSURERS101 Constitution Ave., NW, Washington, DC 20001-2133
Agent Credentialing ... Federal
Sen. Kohl introduced a similar bill (S. 906) in April of this year
Specific reference to NAIC Designation Model
Still problematic because no recognition of NAIC Annuity Disclosure/Suitability Standards
© AMERICAN COUNCIL OF LIFE INSURERS101 Constitution Ave., NW, Washington, DC 20001-2133
Other Resources
FINRA Website
List of all known financial designations
SEC Website
Examples of compliance policies Review training materials of conferring
organizations Verify designations by checking
business cards Maintain lists of approved/prohibited
designations
© AMERICAN COUNCIL OF LIFE INSURERS101 Constitution Ave., NW, Washington, DC 20001-2133
Other Resources
American College Six Criteria
1. Title, purpose, use 2. Source of credential3. Content/examinations4. Prerequisites & recourse for non-
compliance5. Regulator/market review6. Benefit to consumers & advisors
© AMERICAN COUNCIL OF LIFE INSURERS101 Constitution Ave., NW, Washington, DC 20001-2133
Issues Ahead
More Californias?
NAIC/NASAA models focus on process; not the inherent value of a designation/credential
Only 2 designations have so far gone through the accreditation process: Certified Senior Advisor (CSA) and Certified Financial Planner (CFP)
© AMERICAN COUNCIL OF LIFE INSURERS101 Constitution Ave., NW, Washington, DC 20001-2133
Issues Ahead
These 2 designations are far apart in terms of depth of content
Accreditation is time consuming and expensive
Continued focus on insurer responsibility
© AMERICAN COUNCIL OF LIFE INSURERS101 Constitution Ave., NW, Washington, DC 20001-2133
Other Resources ACLI NAIC Annuity Disclosure,
Suitability in Annuity Transactions and Senior Specific Certifications Model Regulation Chart
You can also search for any Senior Designation bill through ACLI’s Legislative Tracker by looking under the keyword: Producer: Senior Designations
Other ACLI material
Questions…