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March 23, 2005 at 07:00 PM
If ever an idea was misbegotten, it is the proposal floating around the regulatory arena and some state legislatures to establish a limited license so that producers could sell only term insurance.
At the recent spring meeting of the National Association of Insurance Commissioners, the Producer Licensing working group passed by a unanimous vote a resolution opposing such limited term licenses.
That should have been the end of the matter. Unfortunately, however, it was not.
It seems that the working groups parent committee, the Market Regulation and Consumer Affairs (D) committee, decided to postpone moving the resolution along. Pressure from some legislators, among other things, appears to be behind the postponement.
The real force behind the push for limited term licenses seems to be coming from a company which has earned its reputation in the term business. This is no other than Primerica, descendant of the old A.L. Williams organization, long a bete noire of the life industry.
Many people in the life insurance business cannot be rational about A.L. Williams and, by extension, Primerica. With its buy term and invest the difference sloganeering and its rampant replacement activities, A.L. Williams in its time drove many agents up the wall. Even now, the very mention of the name has the power to start some of these producers foaming at the mouth.
Since it is not likely that Primerica is unaware of its reputation among other companies and producers, the company is pushing the limited term license proposal with a positivenay, an altruisticspin. A limited term license, it says, would bring new producers into the business who would get to that huge segment of the population that has no life insurance at all and that is being poorly served by the rest of the business.
