On June 2, 2008, the National Association of Insurance Commissioners (the “NAIC”) issued a release announcing adoption of a model bulletin (the “Bulletin”) and Consumer Alert (the “Alert”) to help protect seniors from certain abusive sales practices.  Specifically, the Bulletin and Alert relate to the use of senior designations or titles (e.g. “retirement planner”, “senior consultant”, “senior advisor” etc.) by producers that imply expertise with respect to the senior market, when such expertise does not exist.

The Bulletin, directed at insurance companies and producers, applies to the marketing and sales of fixed and variable life insurance and annuities.  Its provides that producers who misrepresent their level of expertise in marketing and sales activities will be subject to penalties, as well as insurance companies that allow their producers to use misleading designations, including the use of such designations in sales material.

The Alert, directed at consumers, reminds seniors to be cautious of senior designations and certain sales practices.  Specifically, it suggests that consumers do the following:

          ·        Question the credentials and designations of producers representing themselves as experts;
          ·        Beware of “free lunch” investment seminars as there is generally a “catch”;
          ·        Question whether the product makes sense for the consumer;
          ·        Never make a final decision at a seminar;
          ·        Report scams;
          ·        Contact the consumer’s state insurance department for more information.

States which adopt the Alert will modify it to reference the appropriate names and phone numbers of the security and/or insurance regulatory agencies that a consumer should contact for licensing and complaint information.