A key group of regulators has approved measures aimed at curbing use of misleading producer credentials.
Members of the Life Insurance and Annuities Committee at the National Association of Insurance Commissioners, Kansas City, Mo., have approved an alert that would warn older consumers to watch out for flimsy producer professional designations.
The committee members also have approved a professional designations bulletin that would go out to insurers and producers.
The NAIC will be putting the bulletin on the agenda for the next meeting of its plenary.
The plenary is the body that includes all voting members of the NAIC.
The consumer alert would warn older consumers about “free-lunch seminars,” which often offer seniors a free meal along with a product sales pitch.
The alert also would advise senior consumers to question the credentials of experts who hold themselves out to be senior advisors.
The insurer and producer bulletin would apply to the marketing and sales of fixed and variable life insurance and annuities. The bulletin would note that insurance companies are responsible for the advertising of their products, whether by the company or by a producer, and that references to designations are part of such advertisements.
“Any producer who advertises himself or herself as holding special status due to training or advanced education must provide documentation of expertise, such as a course syllabus and proof of successful completion of the course of study or training,” according to the text of the bulletin.
Some members of the NAIC’s Life Insurance and Annuities Committee asked whether the wording of the bulletin draft is strong enough.
Jim Mumford, an Iowa regulator, argued that simply documenting a course of study does not necessarily mean that a designation program offers a valid senior coursework program.
Sean Dilweg, Wisconsin insurance commissioner and vice chair of the Life Insurance and Annuities Committee, said it is important for regulators to act.
The bulletin would be a base that states could customize as they saw fit, Dilweg said.
Dilweg noted that Sen. Herb Kohl, D-Wis., is attacking use of misleading senior designations.
David Leifer, associate general counsel at the American Council of Life Insurers, Washington, urged regulators to use a designations model being developed by the North American Securities Administrators Association, Washington.
“I worried that, if the 50 states are testing standards or course curriculum, that could be a mess for everyone,” Leifer said.