It’s All in a Day’s Work

From learning about insurance compliance to solving a murder mystery!

By Wajiha Kazmi, JD

Where do I begin? After graduating law school, I thought to myself, “how difficult can it be to learn about compliance in the world of insurance?” And boy, was I mistaken. Analyzing legal and compliance issues/reviews in the insurance world is a whole new arena for me. Despite studying various areas of law in the past several years, I could not come to terms with how much there is to the insurance world. But, thanks to Compliance 101 and other sessions at the 32nd Annual Association of Insurance Compliance (AICP) Conference in Denver, CO last week, I learned a lot more about insurance compliance.

Margaret P. Jones and Wajiha Kazmi at AICP 2019

Margaret P. Jones and Wajiha Kazmi at AICP 2019

I’ve heard that AICP always puts on a great event and now I have first-hand experience. The speakers were professional, knowledgeable, and friendly and they presented exceptionally informative content. I felt honored to learn about insurance from people who have been in the field for decades.

Being a first timer at AICP initially made me feel a bit nervous. I was so far from home for the first time; it was a new place, new people, new culture, and a new environment for me. My worries quickly vanished as everyone there was so welcoming and friendly. It was a privilege meeting and conversing with people from different areas of the insurance industry. I particularly liked how interactive all the sessions were. Some people shared concerns and comments, while others raised questions. All the speakers engaged with attendees to the best of their abilities. It was noticeable how much everyone wanted to help one another better understand the issues.

Aside from the lectures, there was time for fun. Delicious food was provided by generous sponsors throughout the conference and this year’s conference was at the heart of the center of Denver; lots to do within walking distance. I didn’t think I would want to explore Denver since I was so far from home, but the tone set by AICP was so comforting that I knew I had to go out and explore what the beautiful had to offer. Of course, I had to buy a souvenir for myself! Speaking of fun, AICP selected a few places for people to have dinner on the last night. I opted for the “Dinner Detective” evening out. A new experience for me! It was different, to say the least. While we enjoyed dinner and conversation, there was a murder mystery that had to be solved. Throughout the night, the “detectives” gave us clues and we had to solve the murder. At the end, someone won a prize for guessing correctly. It was a fun evening with a lot of laughs, good food and conversation — an excellent opportunity to socialize in a casual atmosphere.

Although I felt a little home-sick toward the end of the conference, I was grateful that I had an opportunity to attend this conference. There is no better place to connect with people who do similar work, gain knowledge from people with a great deal of experience, and build relationships that I hope will continue far beyond the realm of the insurance industry.

As a first timer at AICP, I surely hope there will be a next time!

"Colo. Bans ‘Safe’ In Life And Annuity Advertising"

From - July 29, 2014

By Linda Koco

Snippet from article:

Several sources said that the model does not include the terms that Colorado just added to its don’t-use list. However, Colorado regulators may have found that piecemeal efforts to address problems associated with those words were unsuccessful, so they turned to a blanket prohibition, suggested Cailie Currin, president of Currin Compliance Services in Greenwich, N.Y.

“I will not be surprised if other states follow,” Currin wrote in an email. “It is clear that there are many troubling uses of these words in the marketplace today.”

Click here to read the full aricle.

Colorado reminds producers they can’t charge fees for services already compensated through commissions.

Colorado has repealed and repromulgated Regulation 1-2-9, effective May 1, 2014. Much of this new regulation is identical to the previous version. However, of note is the new Section 3, Applicability. The repromulgated Reg. 1-2-9 states that “This regulation shall apply to all insurance producers and insurance agencies over whom the Division of Insurance has authority, with the exception of public adjusters and public adjuster agencies. This regulation does not apply to the sale, solicitation and negotiation of bail bonds.”

That is important for those of us who are on the life/annuity side because the list of itemized acts for which imposition of fees is prohibited may sound more like Property Casualty. The 2014 version of the regulation makes clear it is not so limited. The new version also has definitions and includes a definition of “wholesale intermediary” as “for the purposes of this regulation, a person or organization that deals directly with a licensed retail producer and not with a consumer.”

We get a lot of questions about when fees can be charged in addition to a commission and we see many types of advertising materials that refer to charging fees without being clear what the fee is for and that there is no duplication or “double dipping.”

The “Advertisements Of Life Insurance and Annuities Model Regulation (Model 570)” and most state regulations have language that we cite to warn producers that they should not look to charging fees as an easy way to boost their income. From Section 5 of the model: “No insurance producer may use terms such as ‘financial planner,’ ‘investment adviser,’ ‘financial consultant’ or ‘financial counseling’ in such a way as to imply that he or she is generally engaged in an advisory business in which compensation is unrelated to sales unless that actually is the case. This provision is not intended to preclude persons who hold some form of formal recognized financial planning or consultant designation from using this designation even when they are only selling insurance. This provision also is not intended to preclude persons who are members of a recognized trade or professional association having such terms as part of its name from citing membership, providing that a person citing membership, if authorized only to sell insurance products, shall disclose that fact. This provision does not permit persons to charge an additional fee for services that are customarily associated with the solicitation, negotiation or servicing of policies.” (Emphasis added.)

In Colorado, this newly revised and reissued regulation provides additional guidance about what services cannot be the basis for a fee and also what must be done in the event a fee is charged. We strongly recommend that any insurance producer in Colorado who is contemplating charging a fee for services consult this regulation in addition to Regulation 4-1-2 — ADVERTISING AND SALES PROMOTION OF LIFE INSURANCE AND ANNUITIES.