THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY MARKOSEK, DeLUCA, D. COSTA, BOYD, CALTAGIRONE, DONATUCCI, FABRIZIO, FREEMAN, GEIST, GOODMAN, HESS, HORNAMAN, JOSEPHS, KAVULICH, W. KELLER, KORTZ, KULA, LONGIETTI, MAHONEY, MARSHALL, MILNE, M. O'BRIEN, PASHINSKI, PETRARCA, STABACK, STURLA, SWANGER AND YOUNGBLOOD, MARCH 21, 2011

REFERRED TO COMMITTEE ON INSURANCE, MARCH 21, 2011  

AN ACT

Providing for the regulation of senior-specific certifications

and professional designations in the sale of life insurance

and annuities; authorizing the Insurance Department to

promulgate a regulation; and imposing penalties.

WHEREAS, Pennsylvania has the third-largest percentage of

elderly population in the country; and

WHEREAS, Approximately 2.5 million Pennsylvanians are 60

years of age or older and more than 310,000 Pennsylvanians are

85 years of age or older; and

WHEREAS, Over the next ten years, the number of citizens who

will be at least 60 years of age is projected to increase by

more than 27% to approximately 3.2 million citizens, and the

number of citizens who will be at least 85 years of age is

projected to increase by more than 16% to approximately 365,000;

and

WHEREAS, The Federal Bureau of Investigation (FBI) has

reported that older citizens are most likely to have

considerable savings, own a home and have excellent credit, all

of which unscrupulous individuals target for theft; and

WHEREAS, Individuals attempting to steal these assets will

focus their efforts on older citizens since they are most likely

in a financial position to make considerable purchases; and

WHEREAS, The FBI has also stated that older citizens are less

likely to report being defrauded because:

(1)  they do not know where to report it;

(2)  they are too ashamed at having been defrauded; or

(3)  they do not know they have been defrauded; and

WHEREAS, In some cases, elderly victims may not report being

defrauded out of concern relatives may conclude they no longer

have the mental capacity to manage their own financial affairs;

and

WHEREAS, When an elderly victim does report the crime, the

FBI has found they are often unreliable as a witness; and

WHEREAS, Individuals attempting to take advantage of senior

citizens are keenly aware of the effects of age on memory and

the strong possibility the elderly victim will be unable to

supply investigators with adequate information to build a case

for a successful prosecution; and

WHEREAS, By virtue of the act of November 6, 1987 (P.L.381,

No.79), known as the Older Adults Protective Services Act, the

policy of the Commonwealth is to provide for the detection and

reduction, correction or elimination of abuse, neglect,

exploitation and abandonment, and to establish a program of

protective services for older adults in need of them.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Purpose.

The purpose of this act is to set standards to protect

consumers from misleading and fraudulent marketing practices

regarding the use of senior-specific certifications and

professional designations in the solicitation, sale or purchase

of or advice made in connection with a life insurance or annuity

product.

Section 2.  Scope.

This act shall apply to any solicitation, sale or purchase of

or advice made in connection with a life insurance or annuity

product by an insurance producer.

Section 3.  Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Commissioner."  The Insurance Commissioner of the

Commonwealth.

"Department."  The Insurance Department of the Commonwealth.

"Insurance producer."  A person required to be licensed under

the laws of this Commonwealth to sell, solicit or negotiate

insurance, including annuities.

Section 4.  Prohibitions.

(a)  Senior-specific certification or professional

designation.--It shall be a violation of this act for an

insurance producer to use a senior-specific certification or

professional designation that indicates or implies, in a way

misleading to a purchaser or prospective purchaser, the

insurance producer has special certification or training in

advising or servicing seniors in connection with the

solicitation, sale or purchase of a life insurance or annuity

product or in the provision of advice as to the value of or the

advisability of purchasing or selling a life insurance or

annuity product, either directly or indirectly through

publications or writings, or by issuing or promulgating analyses

or reports related to a life insurance or annuity product.

(b)  Specific prohibitions.--The prohibited use of senior-

specific certifications or professional designations includes,

but is not limited to, the following:

(1)  Use of a certification or professional designation

by an insurance producer who has not earned or is otherwise

ineligible to use the certification or designation.

(2)  Use of a nonexistent or self-conferred certification

or professional designation.

(3)  Use of a certification or professional designation

that indicates or implies a level of occupational

qualifications obtained through education, training or

experience that the insurance producer using the

certification or designation does not have.

(4)  Use of a certification or professional designation

that was obtained from a certifying or designating

organization that:

(i)  is primarily engaged in the business of

instruction in sales or marketing;

(ii)  does not have reasonable standards or

procedures for assuring the competency of its

certificants or designees;

(iii)  does not have reasonable standards or

procedures for monitoring and disciplining its

certificants or designees for improper or unethical

conduct; or

(iv)  does not have reasonable continuing education

requirements for its certificants or designees in order

to maintain the certificate or designation.

(c)  Applicability.--A job title within an organization that

is licensed or registered by a Federal or State financial

services regulatory agency is not a certification or

professional designation unless it is used in a manner that

would confuse or mislead a reasonable consumer when the job

title:

(1)  indicates seniority or standing within an

organization; or

(2)  specifies an individual's area of specialization

within the organization.

(d)  Rebuttable presumption.--There is a rebuttable

presumption that a certifying or designating organization is not

disqualified solely for purposes of subsection (b)(4) when the

certification or designation issued from the organization does

not primarily apply to sales or marketing and when the

organization or the certification or designation in question has

been accredited by:

(1)  the American National Standards Institute (ANSI);

(2)  the National Commission for Certifying Agencies

(NCCA); or

(3)  an organization that is on the United States

Department of Education's list entitled "Accrediting Agencies

Recognized for Title IV Purposes."

(e)  Definition.--As used in this section, the term

"financial services regulatory agency" means a government agency

that includes, but is not limited to, an entity regulating:

(1)  insurers;

(2)  insurance producers;

(3)  broker-dealers;

(4)  investment advisors; or

(5)  investment companies as defined under the Investment

Company Act of 1940 (54 Stat. 789, 15 U.S.C. § 80a-1 et

seq.).

Section 5.  Determination.

In determining whether a combination of words or an acronym

standing for a combination of words constitutes a certification

or professional designation indicating or implying that a person

has special certification or training in advising or servicing

seniors, factors to be considered shall include:

(1)  The use of one or more words such as "senior,"

"retirement," "elder" or like words combined with one or more

words such as "certified," "registered," "chartered,"

"advisor," "specialist," "consultant," "planner" or like

words in the name of the certification or professional

designation.

(2)  The manner in which those words are combined.

Section 6.  Enforcement.

(a)  Penalties and remedies.--Upon a determination by hearing

that this act was violated, the commissioner may pursue one or

more of the following courses of action:

(1)  Issue an order requiring the person in violation to

cease and desist from engaging in the violation.

(2)  Suspend or revoke or refuse to issue or renew the

certificate or license of the person in violation.

(3)  Impose a civil penalty of no more than $5,000 for

each violation.

(4)  Impose another penalty or remedy deemed appropriate

by the commissioner, including restitution.

(b)  Other remedies.--The enforcement remedies imposed under

this section are in addition to any other remedies or penalties

that may be imposed by any other applicable statute, including

the act of July 22, 1974 (P.L.589, No.205), known as the Unfair

Insurance Practices Act.

Section 7.  Existing licenses and designations.

Nothing in this act shall be construed to affect existing

licenses and designations issued and approved by the department.

Section 8.  Prohibited list.

The department may publish a list of prohibited senior-

specific certifications and professional designations, the use

of which by an insurance producer shall constitute a violation

of this act.

Section 20.  Effective date.

This act shall take effect in 60 days.