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NAIFA Board Votes to Support Federal Legislation to Address Designation Concerns | Advocacy Updates | NAIFA
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Advocacy Update: October 17, 2007

NAIFA Board Votes to Support Federal Legislation to Address Designation Concerns

For More Information

Gary Sanders
703-770-8192 or
Jill Edwards
703-770-8158

Earlier today the NAIFA Board of Trustees affirmed action taken by the Policy Formation Subcommittee and adopted a motion supporting the enactment of federal legislation to address concerns regarding the use of designations by agents and advisors. Legislators and regulators have raised concerns that senior citizens are being misled and harmed by the use of certain designations and certifications by insurance agents and advisors that may imply the existence of a level of expertise in senior affairs and financial matters that, in fact, does not exist. These concerns have been reported on by numerous outlets of the national media, including the New York Times and the Washington Post.

The motion adopted by the Board states as follows:

WHEREAS, NAIFA is concerned about recent allegations that agents, advisors and registered representatives of broker/dealers are using designations that may convey an expertise in senior matters where such expertise does not, in fact, exist,

NAIFA does hereby support the enactment of federal legislation directing the states to adopt legislation that creates a structure and system for determining which designations and certifications would be entitled to a “safe harbor” from claims brought against a producer based upon misleading use of a designation.

In order to promote nationwide uniformity, such legislation should express the Congress’ preference that the National Association of Insurance Commissioners and the North American Securities Administrators Association work jointly to develop model legislation for adoption by the states, and to encourage the states to take action the legislation should further provide that if all the states and the District of Columbia have not adopted such legislation by a certain date, the Treasury Department would be directed to develop a list of designations and certifications that would be entitled to a safe harbor.

To aid in the effective enforcement of such legislation, the legislation should also direct the states to require entities subject to their regulatory authority to monitor and supervise the use of designations and certifications by their agents and registered representatives.

Furthermore, in order to better assist and protect consumers, NAIFA shall work with state and federal regulatory bodies to make available to NAIFA members summary factual information regarding the designations and certifications that are currently available to agents, advisors and registered representatives. The intent is that NAIFA members may make such information available to their clients, with such information being for informational purposes only and containing no endorsement by NAIFA of any kind.

NAIFA’s Government Relations staff will be meeting with our industry colleagues to discuss the NAIFA proposal and to seek their cooperation and participation in this effort. We will also be meeting with key members of Congress, including members of the Senate Aging Committee, and state regulators to discuss the NAIFA proposal.