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The US Capitol

Life Health > Running Your Business > Selling

Insurance Advisors Market Advisors to Congress

By Allison Bell

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What You Need to Know

  • An insurer group released results of a survey of the clients of commission-based agents.
  • The list of insurer conference sponsors includes Aflac, Principal and many mutual insurers.
  • The keynote speaker is Sen. Ben Sasse of Nebraska.

The National Association of Insurance and Financial Advisors is sending more than 500 NAIFA members this week to Capitol Hill to sell lawmakers on the idea that earning a living by protecting Americans against mortality, morbidity and longevity risk is an honorable thing to do.

NAIFA members began flying to Washington on Sunday for the group’s two-day congressional conference, which started Monday.

The conference has NAIFA members from every state and the District of Columbia mobilized to walk the halls of the Capitol and the congressional office buildings in an effort to talk to any member of Congress or congressional staff member about NAIFA priorities.

What It Means

Lawmakers are heading into the last major period for legislative activity before the midterm elections.

Members of Congress are looking for ways to raise fees and taxes to generate revenue they can use to pay for efforts to help Ukraine, strengthen pandemic response efforts, aid struggling Americans and support U.S. schools and research labs.

Lawmakers and staffers will enter those sessions with memories of NAIFA members defending the current tax rules for life insurance, annuities and employer-sponsored retirement plans, and arguments about why, from NAIFA members’ perspective, those tax rules are an investment in helping Americans help themselves and reduce their dependence on government programs for those in need.

The Conference

The conference has attracted Sen. Ben Sasse, R-Neb., as its keynote speaker.

The list of corporate sponsors includes three publicly traded insurers: Aflac, American National and Principal Financial.

It also includes six policyholder-owned mutual life insurers: Guardian, MassMutual, New York Life, OneAmerica, Northwestern Mutual and State Farm, along with the American Council of Life Insurers and Gateway Financial Advisors.

NAIFA identifies many of the conference attendees as supporters of its political action committee.

The committee raised $1.2 million from January 2021 through April 30 and has spent $901,000, according to Federal Election Commission data.

The Priorities

NAIFA has some priorities that are in sync with those of most other financial services groups and a wide range of other groups, such as efforts to promote richer, more flexible tax incentives for individual and employer-sponsored savings arrangements, including the Securing a Strong Retirement Act of 2022 bill, or the Secure Act 2.0 bill.

The list also includes other, more contentious priorities, such as efforts to give insurance agents the flexibility to choose between working as employees or as independent contractors.

Some financial professionals see maintaining independent contractor status as a way to increase their personal and financial flexibility, and to build a practice of their own that they can sell.

Other financial professionals see independent contractor status as a mechanism for big companies to avoid having to treat sales representatives as well as they treat home office employees.

NAIFA is also a strong advocate of letting consumers continue to use commission-based annuity sales agents, rather than requiring that all annuity sales agents collect fees from the annuity buyers. That conflicts with the position of some groups that represent fee-based advisors and hope to reduce or eliminate use of commission-based compensation arrangements.

The ACLI Survey

The ACLI has supported the NAIFA fly-in effort by releasing results from a new survey of 506 retirement savers, ages 55 through 70, who have an annual household income from $35,000 to $149,999, and $25,000 to $235,000 in savings and investments, and who work with commission-based financial professionals.

About 84% of those participants agreed strongly or somewhat with the idea that people should have access to financial professionals paid in a variety of ways. Only 1% disagreed strongly with that idea.

Similarly, only 1% disagreed strongly and 2% disagreed somewhat with the idea that in some cases, it’s preferable for a financial professional to be paid through commissions rather than through client fees. About 70% agreed strongly or somewhat with the idea that commission-based compensation is sometimes preferable, and 26% said they were neutral about the idea.

(Photo: Shutterstock)

Allison Bell

Think_Allison

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