Resolution Opposing Limited Term Licenses Advances

Birnbaum said the discussion raises a good opportunity for regulators to take an in-depth look at meeting the needs of the underserved market. He said that arguments made in opposition to the model are based on faulty economic analysis because there is no basis to conclude that increasing the number of agents would increase the availability of insurance to the underserved market.

Both during the “D” Committee at a public hearing earlier in the meeting, the National Association of Insurance and Financial Advisors, Falls Church, Va., supported the resolution.

At the hearing, NAIFA representative Bill Anderson said that putting agents in the market who don’t understand life insurance is not a benefit to a consumer. It will also complicate the producer licensing system, he added.

During the hearing, Bowler had argued that there is a need and that state governments provide an “incubator” for trying new ideas to meet needs.

Bowler cautioned that if Congress does not believe the insurance industry is serving the public broadly, that federal tax exemptions for life insurance could be put at risk in the future. If Congress is trying to raise revenue in the future, it may look at the insurance tax benefit and decide that it can get rid of it, Bowler said.

Peter Schneider, executive vice president with Primerica, Duluth, Ga., personalized the issue of those most in need benefiting from life insurance by referencing a real life example of a man who took a construction job in Iraq to help make ends meet and was killed. His family received a $400,000 check, according to Schneider. He argued that a limited term license would put agents in the market to meet families that would also need a death benefit in the event the breadwinner was killed.

Regulators cite need for uniform producer licensing laws among the states