The National Association of Insurance Commissioners (NAIC) is working out an arrangement to share financial professional licensing information with the Financial Industry Regulatory Authority (FINRA).
A third group, the National Association of Insurance and Financial Advisors (NAIFA), says it would like to weigh in if the NAIC-FINRA information-sharing relationship expands.
The NAIC is a Kansas City, Missouri-based group for regulators.
FINRA is a New York-based financial services watchdog.
NAIFA is a Falls Church, Virginia-based group for advisors.
NAIFA told members in a blog posted last week that the NAIC and FINRA are developing a memorandum of understanding on sharing licensing information for registered representatives and insurance producers. The information shared could include financial professionals’ names, dates of birth, and licensing status details.
Steve Kline, NAIFA’s director of government relations, wrote in a letter Larry Deiter, chairman of the NAIC’s Producer Licensing Task Force, that one concern is how regulators use information about inactive licenses.
“We would urge regulators to not make any final determinations or conclusions or take any action against an advisor based solely on the notification by another regulator that an individual’s license is no longer active,” Kline writes in the letter. “An individual may have opted to not renew a securities or insurance license for a variety of reasons, such as retirement or having voluntarily left the industry, and therefore an individual’s inactive status may not be a result of a state or federal authority concluding that the advisor engaged in malfeasance or improper conduct. If this collaborative effort between the NAIC and FINRA evolves into additional information sharing, we welcome the opportunity to further provide our perspective.”
— Read FINRA Plans Reg BI ‘Preparedness’ Exams, on ThinkAdvisor.