Source of Funds Issue for Life and Health Only Insurance Agents

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If you didn’t know this was coming, you probably haven’t read an article in the insurance industry for some time now, but most everyone has known this was coming for a while. Yes, it’s the dreaded Source of Funds issue in which the states are cracking down on life & health only insurance agents recommending moving securities based products to insurance based products without having the proper securities license to properly analyze the suitability of the risk.

States such as Tennessee and Arkansas have put replacement procedures into place so companies are now having to review where the transaction is coming from in more detail. They must check to see if the insurance agent is properly licensed which can in most cases be a slowdown of processing until they can attain the information they need.

Once a couple of states adopt rules for Source of Funds the rest will follow shortly thereafter.

If you are life or health only insurance agent, be aware of what you are recommending and that you have the proper license to analyze. It will save you a lot of headache with the Departments down the line.

Call Benson Financial Solutions at (855) 291-3577 with any specifics you may be tackling in the future. We appreciate your business!


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