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DOL rule

Technology is The Topic at ACLI Legal and Compliance Meeting

Coeur D’Alene, Idaho

As I traveled back from the beautiful city of Coeur D’Alene, Idaho after the ACLI Legal and Compliance Meeting, I was struck by how the topics have changed recently. At this year’s conference, the DOL rule was certainly present as a topic, but not nearly so much in the foreground as it has been in recent years. Technology, on the other hand, was at least part of every session.

Cybersecurity not only had its own session: it also crept into almost all the others in one way or another. Innovation was equally prominent, as the need to innovate made its way into most conversations. Frustrations with the challenges of regulatory efforts to both allow and restrict innovation were also on many lips.

There were no clear solutions to the challenges posed by these issues, but it was clear that internal legal and compliance efforts, as well as regulatory resources, are being pulled and strained by both. It is an interesting and demanding time. So many more meetings and discussions are to be had as we, collectively as an industry, begin to do more than merely identify the issue, but we continue to dig in and do the work.

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.