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NAILBA May Merge With Finseca

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What You Need to Know

  • Finseca was formed from the merger of AALU and GAMA International.
  • NAILBA was formed in 1980 and represents independent life and financial services distributors.
  • The groups face the effects of the COVID-19 pandemic and policymaker efforts to hunt for new sources of tax revenue.

Finseca — the group formed from the merger of the Association for Advanced Life Underwriting with GAMA International — may combine with the National Association of Independent Life Brokerage Agencies.

NAILBA and Finseca announced today that their boards have voted to start the process of looking into a merger.

“This process is the culmination of significant due diligence conducted by a joint task force that included NAILBA and Finseca members and staff,” NAILBA and Finseca said today in an announcement of the merger effort agreement. “The next step in the process is to bring the joint task force work to the respective memberships.”

Jason Lea, the immediate past chair of NAILBA, said in a comment, included in the agreement announcement, combining with Finseca would give NAILBA’s community the benefits of being part of a larger organization and having a stronger voice.

“The task force strongly believes that Finseca is the perfect partner for NAILBA,” Lea said.

Jeri Turley, Finseca’s chair, and Marc Cadin, Finseca’s CEO, said the combination would help consumers, by giving members more influence over policymaking.

Dan LaBert, NAILBA’s CEO, said the group has served the independent brokerage distribution community well for more than 40 years.

Today, “the threats to the profession have reached critical mass, and it’s time for us to all sit down to discuss what opportunities joining forces would create for each of us individually and collectively,” LaBert said.

Finseca

AALU and GAMA International announced the arrangement that created Finseca in July 2020.

Finseca is too new to have filed a Form 990, or annual report for tax-exempt groups, with the IRS.

More on this topic

AALU was a group for life insurance and retirement planning professionals who helped clients with large or complex arrangements, such as estate plans. Its 2019 Form 990 shows it lost $2.1 million that year on $1.6 million in revenue and $6.4 million in total assets.

GAMA International was a provider of education and networking opportunities for life insurance company and investment firm field managers. It lost $23,558 on $5.8 million in revenue and $3.8 million in total assets.

The combined group has a headquarters office in Washington.

NAILBA

NAILBA was formed in 1980, to serve as a voice for independent life insurance and financial services distribution. It serves about 1,400 brokerage general agencies, and those BGAs have relationships with about 400,000 financial professionals.

NAILBA is based in Fairfax, Virginia.

It reported a $496,271 loss on $1.5 million in revenue and $1.8 million in total assets on its 2019 Form 990 filing.

The group may have signaled its openness to combinations in 2019, when it agreed to have the National Association of Insurance Financial Advisors represent it in connection with some policymaking efforts.

What the Announcement Means

Life insurers and their producers face challenges from low interest rates and the COVID-19 pandemic.

In Washington and state capitals, they face concerns about life insurance and annuity sales standards, and the worry that the federal government might seek to close the federal budget deficit by changing the tax rules that govern life insurance policies, annuities and related arrangements.

Life and annuity groups contend that those tax arrangements are necessary, because they encourage employers to provide important insurance and retirement benefits, and because they encourage consumers to reduce the odds they will need government handouts by using their own money to protect themselves against mortality risk, disability risk, longevity risk and other forms of risk.