The National Association of Insurance Commissioners will begin looking into the use of designations that lull seniors into trusting their financial decisions to advisors who are not qualified.
The issue follows publicity surrounding the value of designations and their use, particularly in relation to the sale of retirement products through promotional free lunch seminars.
The U.S. Senate Special Committee on Aging held a hearing in September on the issue. In a letter to the NAIC dated Oct. 3, Sen. Herb Kohl, D-Wis., the committee’s chairman, urged state insurance regulators to “undertake a comprehensive review of its current suitability standards” and to work with states to adopt and enforce those standards.
During a recent conference call of the NAIC Life and Annuities “A” Committee, Julie McPeak, chair and Kentucky executive director of the office of insurance, said both insurance and securities regulators are discovering are that some of these designations are easily obtainable and can be purchased for as little as $149.
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Existing state laws protect against use of fabricated designations, she noted, but what was not anticipated is the use of designations that exist but offer little value in making the advisor more knowledgeable for the consumer.
She suggested possibly creating both a consumer and producer alert, and then after regulators have thought about the issue, possibly creating a model to bring to states.
NAIC President-elect and Kansas Commissioner Sandy Praeger said the Kansas insurance department and securities division had sent a joint letter to producers in the state on the issue.