Standing strong for independent contractors

The National Association of Insurance and Financial Advisors has always stood firmly behind the professionals who power Main Street, many of whom operate as independent contractors. This model is not only foundational to how licensed insurance and financial advisors work, but it also ensures that families and small businesses have access to a broad range of products tailored to their individual needs.

That model is now under threat in New Jersey.

A proposed rule by the New Jersey Department of Labor and Workforce Development seeks to codify the so-called “ABC test,” which would dramatically narrow the standard for who qualifies as an independent contractor. If implemented, this rule could reclassify many of New Jersey’s licensed insurance agents and financial advisors as employees even though most of these professionals are self-employed entrepreneurs who own and operate their own businesses.

This is not only a professional concern. It is a consumer issue. As we emphasized in our advocacy, reclassifying advisors as employees would limit their ability to represent multiple carriers and ultimately reduce consumer choice in critical areas such as life insurance and retirement planning.

NAIFA has been active and vocal in fighting back.

In June, NAIFA-New Jersey and NAIFA trustee Dennis Cuccinelli met via Zoom with representatives from Gov. Phil Murphy’s office to express concerns on behalf of NAIFA members. Following this meeting, the DOLWD extended the public comment period and agreed to hold a public hearing on June 23, during which Cuccinelli delivered powerful testimony.

“While we support efforts to prevent worker misclassification,” Dennis said, “this rule would significantly narrow current standards and could disrupt the personalized financial services we provide to New Jersey families.”

He rightly noted that “New Jersey families rely on us for access to a variety of financial protection solutions, including life insurance and annuities. These products are not just numbers on a policy, they are lifelines in times of crisis.”

Dennis also urged the state to follow California’s lead in granting exemptions to licensed professionals and reminded regulators that 95% of NAIFA members operating as independent contractors wish to retain that status.

We stand united with our members in New Jersey and across the country. NAIFA fought —and helped defeat — the federal PRO Act in 2021, and we are once again mobilizing to protect our members’ independence.

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Kevin Mayeux, CAE, is NAIFA’s CEO. Contact him at kevin.mayeux@innfeedback.com.