Life insurance associations propose producer licensing reforms

WASHINGTON – Associations representing life insurance companies and producers have proposed reforms to the producer licensing process that will remove barriers preventing qualified individuals from becoming life insurance agents. The American Council of Life Insurers, Finseca and the National Association of Insurance and Financial Advisors presented the proposal today during the National Association of Insurance Commissioners Insurance Summit.

The proposal identifies reforms in multiple areas to improve recruitment, retention and diversity in the life insurance producer community.

They include:

• Greater uniformity and efficiency in background checks and waivers;
• More flexibility for applicants in pre-licensing education class requirements;
• Improved transparency in exam pass rate data to ensure fairness and accountability;
• Offering exams in additional languages to promote diversity in the industry;
• Giving applicants the option to take the producer exam online;
• Expanding mentorship programs for new producers.

“There are an estimated 60 million uninsured and underinsured American households, with an average coverage gap of $200,000,” said Ian Trepanier, ACLI Policy Analyst. “Life insurers are committed to helping more families get the financial protection they need. We support strong standards that allow only qualified applicants to obtain an insurance license. At the same time, we believe removing unnecessary barriers that prevent qualified candidates from becoming life insurance producers is crucial to closing the coverage gap.”

“Facing a $12 trillion protection gap, it is clear America needs more financial security professionals,” said Melissa Bova, Vice President of State Affairs for Finseca. “These proposals will open doors to this amazing and valuable profession for more people and give them a stronger path to success delivering financial security to their clients on our way to financial security for all.”

“Growing and diversifying the ranks of ethical, qualified insurance professionals to serve the needs of Main Street Americans is one of NAIFA’s strategic priorities,” said Maeghan Gale, NAIFA Policy Director. “Talented individuals considering insurance careers currently face too many obstacles, whether they be regulatory hurdles or difficulties establishing themselves in the industry. NAIFA has programs aimed at recruiting, educating, and mentoring young professionals, and we wholeheartedly support regulatory reforms to ease the licensing process while maintaining high standards.”

Read the full proposal here.