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Insurance Continuing Education Blog


States Impose New Insurance Continuing Education Requirements - 12/10/2008

By J. William “Bill” Cooley

Indexed Annuities, Fixed Annuities, Variable Annuities, Ethics, and LTC training are now part of Insurance Continuing Education requirements for license renewal.

The “good old days” of taking your Insurance Continuing Education courses just to get them out completed to renew your license are fading away!  State Insurance Regulators are now mandating that you must actually learn and apply the knowledge from your Insurance Continuing Education courses for your clients’ benefit. Imagine that concept! 

Now the regulators are talking about Insurance, CFP, and/or CLU/ChFC continuing education as a “knowledge-based” and “suitability based” industry with respect to training. This, of course, means Insurance Continuing Education required training on   virtually everything--- from the strategies you use to sell products, the target markets you specialize in, i.e., seniors and baby boomers, your fiduciary responsibility--- to how you choose the products that are suitable for clients.

You remember in years past (as an insurance or securities professional, for example) that you would sell the company’s proprietary product whether it really suited the client or not. In other words, you promoted and sold proprietary products (even when first doing a needs-analysis) and would fill a client’s need with a company product, irrespective of what was the best product available. Anyone ever heard of the “Know Your Customer Rule or Fiduciary Responsibility? Of course you have. But now it is being enforced.

Why the Mandate Rush?

Here is the trend. The State Departments of Insurance are mandating that you take a state-specific Insurance Continuing Education course to renew your license. It can be a course on ethics (and, quite frankly, I believe every state should provide ethics training Continuing Education), annuity training, laws and regulations, long-term care, or anything relating to your practice and how your market products. They say that if you want to renew your license, you need specific training, possibly even before you discuss products with a client. The rush is all about protecting Baby Boomer consumers.

Last year, the state of Iowa instituted a rule stating that, if you wanted to renew  your license either as a     resident or non-resident, you had to complete a four-hour Indexed Annuity training program (Insurance Continuing Education) to market or sell Indexed Annuity products. In 2004, the state of California started the bandwagon and mandated that you must have annuity training to discuss an annuity program with a client. California was first on the map with the rule, Iowa followed with fixed income training programs, i.e., (Fixed and Indexed Annuities), and I’m sure we will see more states adopting this rule. I predict that a few more states will soon implement the rule, then each year thereafter, more will come on board. The time horizon will shrink between states adopting the rule and before you know it, we’ll have 30 more states that will require it.

We are witnessing a groundswell of fiduciary duty and accountability with respect to these products because, in some cases, they are sold to clients who are not suitable, or to those who do not understand them properly. As you know, certain members of the industry are fighting the fiduciary rule for the simple reason that you can be potentially liable in the case of investor unsuitability and be personally sued.

Why All the Changes ?

The State Departments of Insurance and designation authorities are in a serious mode of demanding meaningful Insurance, CFP, and/or CLU/ChFC CE course content. Tongue-in-cheek, of course, it used to be they would “approve” a Monopoly game for Insurance Continuing Education.  As I said above , those days are going right out the window. And in my opinion, it’s about time. Now states are reviewing each and every word of an Insurance Continuing Education course before they will approve it, especially the courses on Partnership LTC, Ethics, and Annuities. 

With respect to Partnership LTC, it’s clear by now that the states are afraid they will have an unfunded liability for baby boomers who will be entering the nursing homes. The stats show that 25% of 78 million baby boomers will get Alzheimer’s disease. So, here we have a potential 19-1/2 million people needing care, many of whom do not/will not have LTC policies. In that predicament, it’s obvious that the states will be on the hook for the lion’s share of the ongoing care of that market. After serious analysis, they decided to partner with the LTC companies that will cover costs for a fixed amount of time, usually the first three years of care. After that, the state is responsible for the remaining time the individual needs nursing home care. Fifteen states already have a partnership LTC requirement, so if you want to sell that partnership LTC, you must have the required Insurance Continuing Education training.

Here is another area where state required Insurance Continuing Education courses are being required. It is called Suitability.

The good news is that organization such as the National Association of Fixed Annuities (NAFA) has been promoting suitability training for years. We are fortunate to have been chosen by the National Association of  Fixed Annuities (   to distribute their content regarding Indexed Annuity Suitability and Fixed Income Products on an exclusive basis.

Please contact me for more info on the required Insurance, CFP, and/or CLU/ChFC Continuing Education courses for your state.

Get smart on the products, and more importantly, how to correctly and ethically market those products. View Insurance, CFP, and/or CLU/ChFC Continuing Education as a chance to learn, gain knowledge, and help your clients.

Remember, Knowledge is Power.


P.S.   Dateline conducted an investigative report on “the non-suitability of certain sales for seniors” on April 13.     Called, 'Tricks of the Trade'  a Dateline hidden camera confronted insurance agents selling annuities to seniors when they thought they were alone. With an estimated 15 trillion dollars under their control American seniors have become more of a sales target than ever for insurance agents seeking to sell them annuities. The investigation revealed what some insurance agents say, and what they don't say, when they think they are alone with a senior. Contact for more information, or purchase a transcript from BurrellesLuce Transcript Service by calling 1-800-777-TEXT.