B/D Compliance when mailing to insurance clients

[Marco P]

If you are securities licensed and plan to do an insurance-related mailing to your non-securities insurance clients, do you have to send a copy of the mailing to your B/D for a compliance review?

I plan on mailing a newsletter to my health/life insurance clients. I'd rather not have the headache of the B/D involvement since it has nothing to do with investments.

 

[Norwayguy]

If you are securities licensed and plan to do an insurance-related mailing to your non-securities insurance clients, do you have to send a copy of the mailing to your B/D for a compliance review?

I plan on mailing a newsletter to my health/life insurance clients. I'd rather not have the headache of the B/D involvement since it has nothing to do with investments.

Of course the only valid answer will be the answer you get from your B/Ds compliance department where I bet they will say yes.

However my B/D allows me to have 2 seperate Business cards and letterheads 1 with Securities information and 1 without any reference to securities, as long as I am not talking to one of my securities clients and I am not talking about securities I do not have to go through the B/Ds compliance department, however if I mention a product of company then it has to go through the Insurance Companies compliance department.

Just remember even if I am right and there is no FINRA rule about nonsecurities conversations with insurance only clients your B/D may take a different view of this so I would still recommend running it by compliance at least once. Getting a response in writing say the hail marys back out of the room while chanting and throwing incense behind you.

 

[Winter_123]

If you are securities licensed and plan to do an insurance-related mailing to your non-securities insurance clients, do you have to send a copy of the mailing to your B/D for a compliance review?

I plan on mailing a newsletter to my health/life insurance clients. I'd rather not have the headache of the B/D involvement since it has nothing to do with investments.

Short answer: Yes

Longer answer: Your B/D is responsible for supervising everything that you do: securities, health insurance, final expense, whatever. They can't supervise without knowledge of what you are doing. Even if they tell you that they dont need to review it, that only means that they are not in compliance rather than you since the burden to supervise is on them. Of course, it gets goofy because they are sometimes supervising in areas where they have no knowledge.

I had a very senior exec with a B/D tell me once that the largerst settlement that they paid out was related to a product that they didnt even sell but it was demonstrated that they had failed to supervise a rep who did.

 

[Delta76]

Ask your B/D. The answer I got (before I dropped all those hassles):

No, but do it for you're own good. If they review it, it goes under their liability umbrella. If not, I'm on my own. I chose not to as there wasn't anything that could get me in trouble.

 

[Winter_123]

Ask your B/D. The answer I got (before I dropped all those hassles):

No, but do it for you're own good. If they review it, it goes under their liability umbrella. If not, I'm on my own. I chose not to as there wasn't anything that could get me in trouble.

No. It is under their liability period. As discussed, if the agent is sued they will go after the deep pockets and sue the B/D for failure to supervise. This is a common occurence and the liability of the B/D in such circumstances is well established. They cannot slough liability on to the agent by failing to review as they are bound by FINRA rules to always be supervising. They can fail to supervise and fail to review and get away with whatever they get away with but it will be no defense in an action against them. In fact it will be blood in the water for plaintiffs attorneys.