Compliance Training Through Independent Marketing Organizations (IMOs) – an idea whose time has arrived

IMOs play an integral role in the promotion and sale of life insurance and annuity products. While they typically don’t have direct contact with consumers, IMOs provide many services to support the insurance producer, including training. The training offered to producers has historically been focused on the sale of insurance products, but one prominent IMO made a decision about a year ago to include something else – they chose to establish a large presence on their website devoted to compliance issues, and make compliance information easily and readily available to their producers.

Obviously, as a compliance professional, I applaud this move on their part. It’s been my experience that most producers want to do the right thing, but often don’t understand all of the compliance implications of working in this industry. Providing compliance education and training to producers protects everyone – the consumer, the producer, the IMO, and the insurer.

If we step back and look at it logically, it makes a lot of business sense for IMOs to provide their producers with compliance education and training. After all, IMOs want to recruit and retain good producers. Unfortunately, some producers end up doing things that cost them their appointments with insurers, which does not benefit the IMO. Providing compliance training to producers reduces the odds that producers will “get into trouble” due to compliance issues, and allows the IMO the opportunity to retain the producer. Compliance training can also be a competitive advantage with recruiting. With increasing regulation on the horizon, such as the DOL Fiduciary Rule (“the DOL Rule”), producers will likely seek out assistance in complying with the new requirements, and quality compliance training can be a differentiator for an IMO.

IMOs are also uniquely positioned to assist producers with the new requirements of the DOL Rule, due to the deep relationships that many of them already have with their producers. Producers are often already comfortable receiving training from the IMO. In addition, many IMOs currently have training platforms in place that can be leveraged for training producers on the DOL Rule.

Providing compliance education and training to producers on the DOL Rule is simply the next evolution in services that IMOs can, and probably should, offer to help producers meet these upcoming challenges.