On September 24, 2008, the National Association of Insurance Commissioners (“NAIC”) adopted a Model Regulation on the Use of Senior-Specific Certifications and Professional Designations in the Sale of Life Insurance and Annuities (the “Model Regulation”). The Model Regulation aims to protect seniors from abusive sales practices and fraud. Specifically, it provides that it is “an unfair and deceptive act or practice . . . for an insurance producer to use a senior-specific certification or professional designation that indicates or implies in such a way as to mislead a purchaser or prospective purchaser that insurance producer has special certification or training in advising or servicing seniors.” The prohibited use of senior-specific certifications or professional designations includes, but is not limited to, the following:
- Use of a certification or professional designation by a producer who has not actually earned or is otherwise ineligible to use such certification or designation;
- Use of a nonexistent or self-conferred certification or professional designation;
- Use of a certification or professional designation that indicates or implies a level of occupational qualifications obtained through education, training or experience that the insurance producer using the certification or designation does not have; and
- Use of a certification or professional designation that was obtained from a certifying or designating organization that.
- Is primarily engaged in the business of instruction in sales or marketing;
- Does not have reasonable standards or procedures for assuring the competency of its certificants or designees;
- Does not have reasonable standards or procedures for monitoring and disciplining its certificants or designees for improper or unethical conduct; or
- Does not have reasonable continuing education requirements for its certificants or designees in order to maintain the certificate or designation.
The Model Regulation is the latest in a series of actions taken by state insurance regulators to protect seniors. The NAIC previously adopted a model bulletin and consumer alert with respect to senior certifications and designations. See our June 10th blog posting for further details.