Insurance Continuing Education Blog
The Challenging World of Insurance Continuing Education -
By Sydney LeBlanc
Financial advisors who either specialize in insurance products or include insurance
products as part of their business mix have the responsibility of keeping up to
date with the changes in tax laws, government benefits programs, and other state
and federal regulations. And most state licensing authorities have mandatory continuing
education requirements focusing on insurance laws, consumer protection, and the
technical details of various insurance policies. That’s a lot for any advisor to
keep up with.
That being said, even though advisors are aware of theses responsibilities and requirements,
it can be an added burden (on top of their firm element requirements) to fulfill
these obligations. Let’s review the challenges and the possible solutions.
The inherent problem is that independent firms don’t have the time, horsepower,
or the knowledge to help their advisors and brokers keep up with their insurance
CE credits or their license renewal requirements. Most do not have an insurance
department that keeps up to date on the latest state insurance rules and regulations.
Plus, most firms do not have any responsibility or liability and that’s why they
don’t focus on it.
Keeping up to date is important. For example, the California Department of Insurance
(www.insurance.ca.gov/) has two-and four-hour ethics courses that California
advisors should know about. Here is what the website says about the regulation:
“Ethics Training Guidelines---Section 2188 et seq. of the California Code of Regulations
are currently being amended. Part of the proposed changes will be the requirement
that Life Agents and Fire/Casualty Broker-Agents complete four (4) hours of ethics
training during their two-year license term. Similarly, Personal Lines Broker-Agents
will be required to complete two (2) hours of ethics training during their two-year
license term. The training will be part of, not in addition to, the California
resident agent's current continuing education requirement.”
So, what is the deadline, how and where can they take the courses? Many advisors
don’t even know about the courses and neither do their home offices because they
aren’t tracking the information. This can be a serious dilemma because—let’s
say---a New York-based wirehouse may not hear about the new California rules
and regs for six months. Meanwhile their advisor’s insurance license is in jeopardy
of lapsing. The problem is exacerbated for those advisors who join an independent
firm and who are appointed with multiple insurance companies (i.e., Allianz, MetLife,
Pru etc) . These advisors are offered the broker dealer’s in-house general agency
(typically 80-90% on inside appointments), but most will keep the outside appointments
(100% commission status) and hang their broker’s license with their indy firm. So
the advisor’s insurance license is kept independent, making it even more difficult
to keep up with all the requirements by him/herself. What tends to happen
is that the advisor begins to lose appointments because they haven’t satisfied the
insurance continuing education credits or they haven’t renewed their licenses or
taken a state-specific course. Currently, 21 states require a state-specific insurance
continuing education course to renew an insurance license. (Do you know if your
state has one?)
It may sound like a no-brainer, but if a law came into effect during the last six
months, and your advisor is busy building his business and is not familiar with
the new law (and why should he be?) and tries to write some insurance business,
he may be in for a rude wake-up call. The State of California says “no you can’t
write the business because you didn’t complete that new insurance continuing education
course.” It bears repeating….the law of the land is that it’s the advisor’s
responsibility to know what new laws, rules, regs, when they took their
previous insurance continuing education courses, and which courses they need to
take to stay current and stay licensed.
But what about the state? Should they, or do they, notify the advisor?
The state will not take the responsibility of notifying thousands of insurance licensees
about new laws because of the potential liability---would the agent be able to sue
for lost business if they didn’t receive the notification and their license lapsed?
Perhaps. Some regulators say it’s just too time-consuming and expensive for the
state to undertake, and that it’s “not their job.”
A Few Solutions
One way advisors can keep track of when they took their last course is simply by
going back to the insurance continuing education provider web page where they took
their previous insurance continuing education online exam. The provider should have
a “course exam and history page” which lets the advisor see the complete history.
Just bookmark the website and check back periodically, putting the dates on the
calendar. Check with the insurance continuing education provider to see if
they have “alarm technology” which reminds the advisor about 3 months in advance
of the renewal date, or for new insurance continuing education courses available
and new rules and regs that are important to know about.
Another website that looks helpful is offered by CE Registry out of Hollywood, Florida
(www.CERegistry.com). Advisors can check insurance continuing education requirements
online, as well as access the states’ insurance continuing education requirements
and personal records of their credits. According to the service advisors can also
access organizations and event flyers, by regions, that are of interest to them
and choose whether they want to receive emails of any local events that will be
within their desired locations. Most important, of course, is that they will send
regulatory and industry updates regarding insurance continuing education requirements.
They offer a personal data page template that can be downloaded to help keep track
of insurance continuing education courses to be sure they get properly credited.
Another helpful area is a listing of the insurance, real estate and CPA associations
with links. Advisors have to register and log in, then go to their menu of services.
I went to “check your credits” and clicked on every state. Every State Department
of Insurance site came up except California (which was being updated). If you direct
your advisors to this site, it surely will help keep them organized and informed.
Lead Them to the Water
Motivating advisors to actually sit down and do the insurance continuing education
is a big problem for many managers and broker-dealers. Managers tell us that their
advisors procrastinate until the last possible moment, or they forget, or
they just can’t get to it because they are so busy with clients. Industry
stats suggest that 85% of all insurance agents/brokers/advisors wait to complete
their insurance continuing education until three months or later before their license
renewal comes due. Basically, you have to say “if you lose your license, you
lose your ability to produce income.” That sounds like good motivation (fear).
Thing is, it’s completely understandable that an advisor doesn’t want to spend a
lot of time going to class or fooling around online taking tests, but it must be
done. So, tell your advisors to go with a insurance continuing education provider
(or recommend one) where they can go online and take the hours quickly and efficiently
at a low cost. Advisors look at insurance continuing education as, “oh I’ve got
to spend 30 long hours on this stuff.” Not necessarily. Advisors really don’t have
to spend 30 hours---ONLY if they choose to attend a live insurance continuing education
class do they have to spend that kind of time. But, the efficiencies of technologies
online allow advisors to use their previous knowledge to complete their insurance
continuing education in much less time. It’s not a grueling process.
One advisor we spoke to said he knocked out 45 hours of CE credits in about 4 hours.
He said he took the online exam, but…here’s the caveat: Some states
do require live insurance continuing education components as a portion of their
total insurance continuing education requirements. For example: Texas requires 15
hours or 50% of the total number of hours (30 hours) of live testing, so an advisor
can take 15 online and 15 in a classroom setting.
Get Them to Drink
Best time to take insurance continuing education courses? During non working
hours, of course. With the advent of online insurance continuing education courses,
it can be done anytime. With a laptop and a wireless set up, many can knock out
the 30 hours in about 45 minutes. One insurance continuing education provider
confided that an advisor could open up a good bottle of ‘98 California Merlot and
before they are finished they will have their insurance continuing education hours
completed. A pretty good way to spend a little time on a Sunday evening.