ACLI, NAIFA Launch Initiative to Address Life Insurance Needs of Underserved Communities

February 17, 2006 – The American Council of Life Insurers (ACLI) and the National Association of Insurance and Financial Advisors (NAIFA) are calling for sweeping legislative, regulatory and administrative changes to improve delivery of needed life and income protection products and services to underserved communities across the United States.

Contact

ACLI: Whit Cornma (202) 624-2442
whitcornman@acli.com

NAIFA: Lee Allen (703) 770-8112
leeallen@naifa.org

The need for this initiative is clear. Less than half of U.S. adults have an individual life insurance policy to secure their families’ futures. One key reason for this financial planning gap is the decline of career agents who can educate Americans on the value of life insurance products and services. Since 1975, the number of new life agent recruits has declined by 46 percent. The average age of a life agent today exceeds 55 years old.

“Life insurance products and services play a unique role in helping Americans prepare for the unexpected,” said ACLI President and CEO Frank Keating. “Our initiative will help ensure that more Americans understand that life insurance should be a critical part of their financial plans.”

“Life insurance agents are on the front lines of helping Americans face growing challenges to financial protection and retirement security,” said NAIFA CEO David F. Woods, CLU, ChFC, LUTCF. “If fewer agents are available to deliver these services, then fewer Americans will receive the guidance necessary to meet the financial security needs for themselves and their families.”

The ACLI-NAIFA initiative calls for legislative, regulatory and administrative changes that support uniformity, efficiency, and the growth of a career agent field force. The initiative includes:

Full implementation of the NAIC Producer Licensing Model Act in the states. The act governs the qualifications and procedures for the licensing of insurance producers.
Twenty hours of pre-licensing education in states where it is required and an allowance for online classes.
A uniform licensing structure that includes the option of obtaining a “life only” or a combined life and health license. Today, three states do not allow for a life-only option.
Greater flexibility in the sequencing of licensing steps that allows applicants to meet requirements in an order that is more convenient and economical for them.
Procedures that allow for seamless transition of resident licenses for agents who relocate to another state.
Development of uniform testing standards and educational materials.

The initiative aims to maintain strong licensing standards that ensure a quality field force while removing unnecessarily burdensome requirements that would discourage potential qualified recruits from pursuing a life agent career. ACLI and NAIFA look forward to working cooperatively with the National Association of Insurance Commissioners, testing and education service providers, and others to build support for these initiatives. The ultimate goal is to build a stronger life insurance industry and a more secure future for all Americans.

About ACLI: The American Council of Life Insurers (ACLI) is a Washington, D.C.-based trade association whose 377 member companies account for 91 percent of the life insurance industry’s total assets in the United States, 90 percent of life insurance premiums and 95 percent of annuity considerations. In addition to life insurance and annuities, ACLI member companies offer pensions, including 401(k)s, long-term care insurance, disability income insurance and other retirement and financial protection products, as well as reinsurance. ACLI's public Web site can be accessed at www.acli.com.

About NAIFA: Founded in 1890 as the National Association of Life Underwriters, the National Association of Insurance and Financial Advisors comprises 800 state and local associations representing the business interests of 225,000 members and their employees nationwide. Members focus their practices on one or more of the following: life insurance and annuities, health insurance and employee benefits, multiline, and financial advising and investments. NAIFA's mission is to advocate for a positive legislative and regulatory environment, enhance business and professional skills, and promote the ethical conduct of its members. NAIFA's website can be accessed at www.naifa.org.