FOR IMMEDIATE RELEASE

STATE REGULATORS PROTECT CONSUMERS
FROM INSURANCE FRAUD
New Regulation Specifically Addresses Use of ‘Senior’ Titles

NATIONAL HARBOR, Md. (Sept. 24, 2008) — The National Association of Insurance Commissioners (NAIC) today adopted a model regulation to help protect insurance consumers — particularly seniors — from unscrupulous, abusive sales practices and fraud.

The new “Model Regulation on the Use of Senior-Specific Certifications and Professional Designations in the Sale of Life Insurance and Annuities” establishes standards for the use of senior-specific certifications and professional designations in the sale or solicitation of life insurance and annuities.

“Especially in these trying economic times, Americans should be able to trust the people who handle their money,” said NAIC President and Kansas Insurance Commissioner Sandy Praeger. “State insurance regulators will take swift action against those who would mislead consumers with titles that imply special expertise that doesn’t really exist.”

Individuals selling these products, particularly to seniors, often boast designations and credentials that use terms such as “certified,” “accredited,” “retirement planner,” “senior advisor” or “senior consultant.” The NAIC model regulation prohibits the use of such senior-specific certifications or professional designations in advising or servicing seniors in the purchase of life insurance and annuities.

The NAIC’s adoption of this model regulation is the latest in a series of activities state insurance regulators have taken to protect seniors. A recent model bulletin cautions insurers and producers against the improper use of senior designations, stating:

• Producers who misrepresent their level of expertise in marketing and sales activities will be subject to penalties under state law.
• Insurers that allow their producers to use misleading designations will also be subject to penalty under state law.

And, a recent Consumer Alert offers these tips:

• Question the credentials of “experts.”
• Beware of “free lunch” investment seminars.
• Ask yourself: Does this product make sense for me?
• Never make a final decision at a seminar.
• Report scams.
• Contact your state insurance department for more information.

“Many seniors have worked hard to accumulate a lifetime of savings. Since older adults are the fastest growing segment of investors, they have become the focus of many financial services firms' marketing and sales activities,” said Wisconsin Insurance Commissioner Sean Dilweg, who is chair of the NAIC Senior Issues Task Force. “This proposal is vital in providing confidence in the expertise surrounding the sales of these insurance products to our senior consumers.”

About the NAIC

Formed in 1871, the National Association of Insurance Commissioners (NAIC) is a voluntary organization of the chief insurance regulatory officials of the 50 states, the District of Columbia and five U.S. territories. The NAIC has three offices: Executive Office, Washington, D.C.; Central Office, Kansas City, Mo.; and Securities Valuation Office, New York City.

The NAIC serves the needs of consumers and the industry, with an overriding objective of supporting state insurance regulators as they protect consumers and maintain the financial stability of the insurance marketplace. For more information, visit www.naic.org.

You are currently subscribed to the “NAIC News Release” electronic service.
For information regarding this service, please contact the NAIC Communications Division, 2301 McGee Street, Kansas City, MO 64108, 816-783-8909.

To unsubscribe from NAIC Electronic Services, send a blank e-mail to NAIC Opt Out services.

[ NAIC Web Site | Search NAIC and State Insurance Department Sites  ]
[ Copyright & Reprint Info | Privacy Statement]

©2008 National Association of Insurance Commissioners. All rights reserved.