One of the problems we have inside our annuity industry (and one of the biggest problems the regulators have with us) is how we represent ourselves to consumers and the buying public. Personally, I believe every annuity professional should be comfortable saying, “I’m an insurance agent and I’d like to talk about fixed annuities.” Instead, we have a tendency to refer to ourselves as “retirement consultants” and “senior planners.” That is a problem. Annuity professionals sell an insurance product – a very valuable insurance product – called the fixed annuity.

NAFA, the National Association for Fixed Annuities, believes anyone who sells a fixed annuity is a valuable member of our insurance family and offers a service that is invaluable to Americans planning for retirement and those already in retirement. So whether you’re an insurance agent, an investment advisor, or a broker who recommends fixed annuities to your client for consideration, you are an incredible part of the future of America’s retirement security.

But we continue to struggle with the proper use of professional designations and representing ourselves as something other, something different, than what we are – annuity professionals who educate clients about the use of annuities in a sound financial plan and the benefits of purchasing a fixed annuity early in the retirement planning process. “I’m an investment adviser and I’d like to talk to you about fixed annuities.”

Currently about 36 states (over 70 percent) have approved the 2008 NAIC Model dealing with the professional designations. Model 278 has the long title of “Use of Senior-Specific Certifications and Professional Designations in the Sale of Life Insurance and Annuities” and is a template for how agents, brokers and advisors should use designations when marketing themselves and their products to consumers. NAFA just finished its Principle Paper for Use of Professional Designations. It is available to its members as an additional resource and reference tool. Both the NAIC Model language and the Principle Paper are available to NAFA members at www.nafa.com.

State specific rules

Some of the more populous states, including Florida, California and Texas, have state-specific rules about the use of designations. Florida prohibits an insurance producer from using a professional designation in the solicitation of or in giving advice related to an insurance transaction, unless it was obtained from an organization that has “consistently published standards and procedures for ensuring the competency of certificate recipients on specific subject matters.” Florida does not endorse any particular designation or certification. California has an approved list of “senior” designations at their department of insurance website and requires that the seller hold a license for four years to sell products for which the designation is used. Texas, broadly, prohibits the use of designations falsely “suggesting expertise.” “I’m a broker and I’d like to talk to you about fixed annuities.” NAFA’s state-by-state analysis of specific state requirements can be found in the association’s 50-State Survey – Regulations Governing Use of Professional Designations in Annuity Sales It is a great resource for NAFA members informing them what specific states have enacted and what they require. 

In recent years, the number of designations used by individuals and groups engaged in the sale of annuity products has increased substantially. Meanwhile, according to the U.S. Census Bureau, the number of older Americans is growing: in 2010, one-quarter (25 percent) of the U.S. population was at least 55 years old, compared to 21 percent in 2000. Moreover, the number of Americans between the ages of 55-59 grew 46 percent since 2000, and the number in the 60-64 year-old segment grew 56 percent during the same period. These statistics just confirm the need to use professional designations responsibly and compliantly. 

NAFA urges all annuity professionals to learn about their states’ requirements and their carriers’ requirements. Some of the best practices and cautionary antidotes highlighted in NAFA’s Principle Paper for Use of Professional Designations include:

  • Do only use designations awarded by a reputable, accredited organization within the insurance and financial industry.
  • Recognize that insurers or regulators may reject entirely some designations because they are considered to have insufficient rigor, scope or applicability to the sale of insurance and annuities.
  • Do not use designations intentionally similar to other accredited designations that further obscure your qualifications.
  • Do not use titles that may mislead consumers into believing a designation or education degree was awarded, when that is not the case (e.g., a “Senior Specialist”).  

We represent a great product. Fixed annuities are the only products that provide true insurance security for retirement – a defense against market disasters, protection from outliving savings, and protection from interest rate slumps – with guaranteed floors, income and minimum interest. So show your true colors.

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