Legislative and regulatory threats to the industry, and actions that are needed to counter them, were the focus of Sunday’s opening general session of the National Association of Insurance and Financial Advisors’ annual meeting and career conference, held in San Antonio. NAIFA’s leadership team, from the CEO on down, used the occasion to call on members to remain vigilant against moves by the federal and state governments, including efforts to tax the inside build-up or cash value of permanent life insurance policies.
“The tax-favored treatment of our products remain at risk,” said outgoing NAIFA President Robert Smith. “To move forward, we need to have more feet on the ground.” Translation: More life insurance and financial service professionals whom NAIFA can call on to help advance key components of the association’s mission–political advocacy to protect the industry and its products; and the professional development of its members.
To that end, NAIFA is establishing alliances with life insurers through its corporate partnership program. The association’s relationship with the carriers, said Smith, is symbiotic: The association needs the companies to recruit and train new agents; they, conversely, depend on NAIFA to protect the industry’s core products and help advisors succeed in their practices.
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To further its advocacy, membership and professional development goals, said Smith, NAIFA also is deepening alliances with sister organizations. They include the American Council of Life Insurers (ACLI), the Association for Advanced Life Underwriting (AALU), GAMA International, Women in Insurance and Financial Services (WIFS), the Million Dollar Round Table (MDRT) and The National Association of Independent Life Brokerage Agencies (NAILBA).
The alliance-building extends to NAIFA’s state associations. Just in the past year, said Smith, nearly 20 states representing 45 percent of the organization’s membership, are participating in national-state partnerships, including co-promotion of state association conferences and symposia.
One result of all the partnering activity: Sixteen states have boosted their membership ranks, up from just two last year. In the corporate arena, Smith noted, Thrivent Financial has added 800 of its field agents to the association’s ranks.
New and recent recruits were among the 1,000-strong agents who participated last April in NAIFA’s inaugural Congressional Conference, a highlight of which was a “Day on the Hill:” the lobbying of legislators by NAIFA members to preserve the existing tax regime governing life insurance products in the coming debate over tax reform.
That regime is under increasing threat, said Smith, because of the growing pressure on Congress to find new sources of revenue to close the budget deficit and burgeoning national debt.
“The inclination in both houses of Congress is to start with a clean slate, which means eliminating all tax deductions and exemptions,” said Smith. “We’ll have to fight to get our tax provisions back in.
“The federal deficit is now $17 trillion,” he added. “Until the deficit is under control–and this could be a long-term problem–we believe that our industry and NAIFA will be at risk.”