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Regulating the Use of Designations} Advocacy | NAIFA
Advocacy

Regulating the Use of Designations

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Gary Sanders
Senior Counsel, Law and Government Relations
(703) 770-8192

Jill Edwards
Director, Federal Relations
(703) 770-8158

Legislators, regulators and the media have raised concerns in recent months that senior citizens are being misled and harmed by the use of certain designations and certifications by insurance agents and advisors that may imply the existence of a level of expertise in senior affairs and financial matters that, in fact, does not exist. These types of allegations are potentially damaging to NAIFA members because they affect the reputation of all agents and advisors and could compromise the public’s trust in insurance agents.

Since NAIFA is the leading agents and advisors organization, NAIFA’s leadership decided early on that NAIFA could not – and should not – remain silent on this issue. As a result, NAIFA has been actively engaged in this issue from the start—we have held conversations and meetings with Congressional staff (of the Senate Aging Committee and key members of the Committee), the North American Securities Administrators Association (NASAA, the NAIC-type association for state securities regulators), members of the NAIC leadership, the American College and the ACLI.

NAIFA staff testified on this issue at NAIC National Meetings in 2007 and 2008, and our state associations have been actively involved in regulatory activity on this issue in Massachusetts, Nebraska and other states. We have also filed comment letters with the NAIC, NASAA and the Senate Aging Committee regarding draft legislation, rules and bulletins proposed by these groups. Copies of these proposals and NAIFA’s comment letters can be reviewed by using the links below. You will also find a link to NAIFA’s Policy Statement: Regulation of the Use of Designations.

At the 2008 Summer NAIC National Meeting, the NAIC adopted an Insurer and Producer Bulletin and Consumer Alert designed to guide insurers/producers and assist consumers with respect to the appropriate use of senior designations. On July 15, 2008 the NAIC’s Life Insurance and Annuities (A) Committee approved a new Model Regulation on the Use of Senior-Specific Certifications and Professional Designations in the Sale of Life Insurance and Annuities; this new model was given final approval by the full NAIC membership at the NAIC’s Fall National Meeting in September 2008. The new model follows the approach for regulating senior-specific designations taken in the model rule adopted on April 1, 2008 by the North American Securities Administrators Association (NASAA). The Insurer and Producer Bulletin and Consumer Alert can be reviewed here; the NAIC model regulation can be reviewed here; you can also read the joint comment letter in support of the NAIC effort which was submitted by NAIFA, the ACLI and The American College. The NASAA model Rule can be reviewed here.

Both models are designed to stop the use of misleading senior-specific designations by establishing 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. Neither model references specific designations; rather, individual designations will be measured against this standard. The models establish what is essentially a safe harbor for designations that (i) are not primarily sales/marketing oriented and (ii) are issued/accredited by the American National Standards Institute, the National Commission for Certifying Agencies, or an institution of higher education. The models also expressly prohibit 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.

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 assumed a leadership role in this issue from the start. Through meetings between NAIFA’s leaders and the NAIC leadership, written comment letters and testimony at NAIC meetings, NAIFA had urged the NAIC to become actively engaged in this issue and to develop a model regulation based on the NASAA model. NAIFA, along with The American College, submitted written comments and testimony on both the NAIC and NASAA proposed models, and the final NASAA model rule and NAIC model regulation include many of the revisions suggested by NAIFA and The College. We have also had numerous meetings with the leadership of both the NAIC and NASAA and with the staff of the Senate Aging Committee, which has held a hearing and introduced legislation on the issue of senior designations.

New information and materials will be added to this page as they are developed.