Insurance Agents

Some insurance products, like variable annuities, are securities under federal law. Others, like fixed- or fixed-indexed annuities, are not.

As you consider different types of investment professionals to help you with your financial needs, here’s what you need to know about insurance agents.

• What they are: An insurance agent is a salesperson who can help individuals and companies obtain life, health or property insurance policies and other insurance products including different types of annuities.
• Who regulates them: Every state, along with the District of Columbia and U.S. territories, has an insurance commission that licenses the insurance agents and insurance companies who do business in that jurisdiction. State insurance commissions also impose sales and marketing rules and require companies to file financial reports to assess their ability to honor claims. You can contact your state insurance commissioner by visiting the website of the National Association of Insurance Commissioners (NAIC) at www.naic.org. NAIC also offers a database of financial and disciplinary information for insurance companies nationwide. If an insurance agent offers products that are considered securities—such as variable annuity contracts or variable life insurance policies—the agent must also be licensed as a registered representative and comply with FINRA rules.
• What they offer: Insurance agents described as "captive" work exclusively for one insurance company and can sell only the policies and products that company offers. Independent insurance agents can represent multiple companies and typically try to find insurance policies that offer the best coverage for your circumstances.

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