A deluge of insurance regulations have been issued recently, most of which agent/brokers need to keep abreast of, and for which insurance and financial services planners need to construct educational programs. In the past two years alone, the NASD (formerly the National Association of Securities Dealers) has released 90 new rules.
The challenge is not only staying abreast of all the regulatory changes, but also in constructing educational programs that step carefully through the compliance-training minefield.
"The rules don't tell very much how to sell," said Michael Brown, head of B/D Solutions, an Atlanta-based consulting firm. "It's up to the individual firms to instruct brokers and agents how to do it."
Current insurance training protocols tend to concentrate in two areas: proactive sales and marketing, including client retention; and compliance protocols in the face of regulatory oversight.
New training protocols are recognizing that the two tasks — sales and compliance — often are in conflict with one another.
"I suggest that training meetings have the compliance and marketing officers on stage at the same time," Brown said. "You can take situations from the sales people beforehand, and then ask the compliance guy how he would market the products, and ask the marketing person how he would oversee compliance. It's a delicate balancing act."
Increasingly important is educating Office of Supervisory Jurisdiction managers. These agents, tapped by their companies to help impose new regulatory compliance, are often small-shop or independent professionals who now must take responsibility for entire regions of brokers and agents.
"Supervision is no longer just putting one's initials on sales orders, but rather keeping an eye on people all the time, to see what they have their hands in," said Brown. "And this requires special supervisory training."
The federal government thinks so as well. This summer, the Securities and Exchange Commission and NASD released a report critical of broker-dealer sales of variable annuities and life insurance. The report identified "weak" sales practices, where customers were sold variable products without fully understanding them, or that were inappropriate to their needs.
NASD is proposing new rules tailored to sales of deferred variable annuities, including new sales practice standards, disclosure, supervisory approval and sales force training requirements.
Responding to the need for enhanced training, Aetna recently launched what it called the industry's first comprehensive financial concepts training program, aimed specifically at brokers of health care insurance. Aetna said it is part of "a broad broker curriculum."
"Brokers and consulting firms are finding it increasingly difficult to find qualified, experienced individuals for key roles, so they often recruit talented, but newer, less-seasoned people," said Roger Lambourn, president, Lockton Dunning Benefits Company, a national brokerage company headquartered in Kansas City, Mo.
"As a result, training existing staff, especially in financial concepts and funding arrangements, has become essential in order to deliver high-quality consulting to our clients."