LEGACY
BULLETIN!
Administrative
and compliance information critical to your business.
October 19,
2009
In this
issue:
The Arkansas Insurance Department and Arkansas Securities
Department have joined forces to remind Producers not to
recommend the replacement of securities—including mutual
funds, stocks, bonds, and other investments—unless they are
registered (licensed) with the Securities Department as an
investment adviser or investment adviser representative. This
would include selling a mutual fund to fund a fixed annuity or
selling a stock to pay for a fixed whole life insurance
policy. Such recommendations are considered the offering of
investment advice.
Producers who improperly recommend replacement of
securities are subject to cease-and-desist orders and fines
from both agencies. For details, read Arkansas Insurance
Department
Bulletin No. 14-2009. While AR specifically
has issued this guidance, please note that many other states
have taken a similar position. In general, Producers are
reminded:
- Not to give advice on topics on which they are not
licensed or appropriately trained or educated.
- Not to recommend any replacement unless it is in the
customer’s short- and long-term best interests and the
customer is fully informed of the advantages and
disadvantages of the replacement in question.
The Idaho Department of Insurance and Idaho Attorney
General are warning residents of a mail fraud scheme involving
counterfeit checks bearing the Nationwide Insurance name.
Consumers in up to 10 states have reported receiving such
checks. Recipients are told they must cash the $4,500 check
and then forward $3,750 to a U.K. address to receive a
$150,000 prize. The department and Nationwide Insurance are
investigating who may be behind the scheme. For details, read
the agencies’ October 7, 2009,
press release.
Take time now to update your contact information via
LegacyNet®—you’ll ensure that you receive
information critical to your business and that you
comply with Legacy’s Producer Agreement. Under the
Producer Agreement, Producers agree, among other
things, to accept and review notifications—including field
bulletins—sent by Legacy via e-mail and/or fax and to maintain
a current mailing address.
Updating your contact information is easy: From My
LegacyNet, click “Update My Profile,” select “Personal
Information,” edit your information, and save your
changes!
Because of the Thanksgiving holiday, commissions for the
week of November 23 will be paid Wednesday, November 25. To be
paid commissions on this day, all business must be received by
November 24. Legacy offices will be closed November 26–27 for
the Thanksgiving holiday, and December 24–25 for the Christmas
holiday.
Arkansas recently adopted Department Rule 97, which
implements requirements for replacement sales of life
insurance and annuities. The changes, which take effect
January 1, 2010, reflect the most recent NAIC Model
Replacement Regulation, and also require Producers to complete
a replacement memorandum comparing provisions of the existing
and proposed contracts. For a summary of this requirement and
sample form listing contract provisions that may be compared,
see Arkansas Insurance Department
Bulletin No. 8-2009. For the full text of
Rule 97,
click here.
Louisiana SB 156, which takes effect January 1, 2010,
updates Producer licensing and continuing education
requirements. Changes include the allowance of online or
self-study pre-licensing education, an increase of continuing
education hours from 16 to 24 hours, and permission for the
Commissioner of Insurance to require fingerprints for all new
licensure applicants. For the full text of SB 156,
click here.
Producers who sell annuity products in Arkansas must
complete
four hours of training for annuity suitability by
July 15, 2010, and each year thereafter. Although the
training is not a requirement for licensure, failure to
complete annual training could result in sanctions against the
Producer and insurer. Producers must verify completion of the
annuity training and maintain documentation for at least seven
years. For a list of approved CE courses, see
Need To Know. For details on Rule 82, read
Arkansas Insurance Department
Bulletin No. 11-2009.
As always, thank you for your
business!
Have questions?
Call Field Support at 888-457-0431
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