Limited Term License Proposal Gets A Lease On Life
Salt Lake City
A unanimous decision by regulators to adopt a resolution opposing limited term licenses was short-circuited by a call from different quarters for more discussion on the issue.
Bills that would allow the creation of limited licenses to sell term insurance have appeared in several state houses including Alabama, Louisiana, Mississippi and Illinois.
Primerica Financial Services, Duluth, Ga., has been advocating the creation of these licenses as a way to make insurance available to the underserved lower and lower middle class markets. Opponents, which include the National Association of Insurance and Financial Advisors, Falls Church, Va., maintain that the limited licenses will allow agents to circumvent needed educational requirements.
During the spring meeting of the National Association of Insurance Commissioners here, the Producer Licensing working group unanimously adopted a resolution opposing these licenses.
The resolution also rejected requests to establish any other additional limited lines that may be proposed “because the implementation of any new limited line license would not preserve the necessary consumer protections and would not be consistent with the adopted uniform licensing standards of the NAIC.”
But the working groups parent committee, the Market Regulation and Consumer Affairs (D) committee, postponed the resolutions advancement until further discussion takes place.
Arguments for forestalling the resolution included a legislators concern that there would be an encroachment on legislative authority to introduce bills legislators felt were appropriate for their state. Rep. Shirley Bowler, R-Harahan, La., offered a counter resolution, which she was told to submit in writing.
In an interview with National Underwriter, Bowler detailed her concerns. She questioned the unwillingness to be open to new ideas that could potentially improve the insurance market, likening it to “a librarian who doesnt want books disturbed.” The value of state authority is that it can offer an incubator for new ideas, Bowler explained. Uniformity should not be the total goal of regulation, she said.
“Term life can be a good buy, a smart buy and if we can find a way to offer it to consumers, we really should do it,” Bowler added.
Regulators approve the policies that agents bring to consumers, so there is regulatory oversight of what is being sold, she continued. Bowler, who said she favors free market principles, maintains that the issue deserves more discussion.