Several insurance trade groups are making clear to the new Consumer Financial Protection Bureau (CFPB) that while the insurance industry supports the agency’s moves to stop exploitation of seniors during the sale of financial products, the agency has no jurisdiction over insurers or agents.
The industry’s views were contained in comments sent to the agency in response to a request for comment on whether the agency should act to regulate the use of financial advisor certifications and designations regarding the sale of investment products to seniors.
The issue of senior designations was included as part of a request for comment on a package of options available to deal with the exploitation of seniors and impose “best practices” in the sale of investment products to them.
More than 700 comments have been received by the agency on the issue. The comment period closed Tuesday.
Making clear the industry’s position were comments from the Committee of Annuity Insurers (CAI), which represents 30 insurers, the National Association of Insurance and Financial Advisors and the Insured Retirement Institute.
Hubert H. “Skip” Humphrey, head of the CFPB’s Office for Older Americans, said in response to the request that, “We look forward to reviewing the comments we received about the certification and designations of seniors’ financial advisors.”
He added that, “We know that con artists and, sometimes even family members, think older people are easy targets for financial exploitation and abuse. We hope the comments we received will help us develop tools for seniors so they can make sound financial choices and protect their financial assets.”
But, in their comment letters industry trade groups indicate that while they support the agency’s efforts, the Securities and Exchange Commission, the Financial Industry Regulatory Authority, and state insurance regulators are already on the case.
And, they said that Dodd-Frank specifically says the CFPB should stay hands off when it comes to regulating those engaged in the “business of insurance.”
A provision of the law, titled “Senior Investor Protections,” offers grants to states that implement legislation protecting those 62 and older from professionals wielding misleading certifications or designations.
The law references both the North American Securities Administrators Association and the NAIC model rules on the use of senior-specific certifications and professional designations.