I'm studying for my exam and have some questions...

[Spin]

In my AZ state law book it says

" A producer that is licensed with a life line of authority is deemed to meet the licensing requirements to operate as a life settlement broker as long as they pay any applicable fee and, within the first 30 days of operating as a broker, they must notify the director that they are acting as a broker. A broker may renew a license by paying the renewal fee. The expiration date of the broker authority coincides with the expiration of the life line authority."

So I will be an independent agent, which I understand is acting as a broker. Is that what the above is referencing or is life settlement something different?

 

[Tahoe Ray]

In my AZ state law book it says

" A producer that is licensed with a life line of authority is deemed to meet the licensing requirements to operate as a life settlement broker as long as they pay any applicable fee and, within the first 30 days of operating as a broker, they must notify the director that they are acting as a broker. A broker may renew a license by paying the renewal fee. The expiration date of the broker authority coincides with the expiration of the life line authority."

So I will be an independent agent, which I understand is acting as a broker. Is that what the above is referencing or is life settlement something different?

You're acting as an agent, not a broker.

This is regarding life settlements which is a totally different thing (selling an existing life policy to an investor/company) and something that you're unlikely to get involved in very often unless you choose to specialize in that market.

 

[Spin]

Regarding solicitation rules, the book says:

"Insurers and producers are not permitted to display guaranteed and non-guaranteed benefits as a single amount and in close proximity."

What does this mean?

 

[DHK]

You cannot combine guaranteed and non-guaranteed into a single return or result. They are two separate things and must be disclosed as such.

If you ever look at an illustration, they are under separate columns. They have to be clear and differentiated.

 

[Allen Trent]

You cannot combine guaranteed and non-guaranteed into a single return or result. They are two separate things and must be disclosed as such.

If you ever look at an illustration, they are under separate columns. They have to be clear and differentiated.

does that mean you cant create spreadsheets to compare only the non-guaranteed projected columns of life to other investments like 401k/IRA?

 

[DHK]

There are company rules and there are agent/producer rules.

The company must disclose guaranteed and non-guaranteed.

The agent/producer can produce any report that is accurate as long as it's 'supplemental' to the actual compliant illustration. All financial planning reports and comparisons would be 'supplemental' to the actual illustration.

I highly doubt the exam will cover anything on a producer level, so I would think in terms of what the company can and cannot do in their official marketing, especially when marketing to consumers.

 

[DHK]

Btw, just to bring home that point, this is the disclosure I put on the page where I illustrate the life insurance of my custom reports:

"This supplemental illustration is not valid without the basic illustration. Refer to the Basic Illustration for the Guaranteed Elements and other important information. This supplemental illustration presumes the non-guaranteed elements will continue as assumed for all years shown. This is not likely to occur, and actual results may be more or less favorable."

 

[Lloyds of Lubbock]

"Does that mean you cant create spreadsheets to compare only the non-guaranteed projected columns of life to other investments like 401k/IRA?"
Send one to your compliance department and get back to me!

 

[Allen Trent]

"Does that mean you cant create spreadsheets to compare only the non-guaranteed projected columns of life to other investments like 401k/IRA?"
Send one to your compliance department and get back to me!

Or the state insurance dept. Some carriers apps ask if you used a sales illustration & if you answer yes, you have to submit it with the case

 

[Allen Trent]

Btw, just to bring home that point, this is the disclosure I put on the page where I illustrate the life insurance of my custom reports:

"This supplemental illustration is not valid without the basic illustration. Refer to the Basic Illustration for the Guaranteed Elements and other important information. This supplemental illustration presumes the non-guaranteed elements will continue as assumed for all years shown. This is not likely to occur, and actual results may be more or less favorable."

I personally like it as it is how I like to compare, etc. But I don't think the carrier, the compliance dept or the state insurance dept would approve & they all would hold it to the marketing standards of the state