INTRODUCTION To enhance the United Life Insurance Company’s compliance and market conduct systems and processes, this Compliance Manual has been developed as a guide for you to use when doing business with us. Compliance involves, but is not limited to, adhereing to the practices, policies and procecdures established by state insurance departments, the National Association of Insurance Commissioners (NAIC) and United Life Insurance Company. These are to act as guidelines in deciding what actions should be taken in certain sales presentations and selling situations. This manual informs you of United Life’s expectations of you and of the basic laws which you are subject to as you carry out those expectations. If there are differences between this manual and any regulatory rules or guidelines, the more restrictive shall apply. Regardless of any pertinent regulations governing your behavior as an agent, when you are representing United life Insurance Company, we require that you act with the utmost integrity. We expect that you will exhibit conduct befitting the company and make only suitable recommendations to your clients. Improper business conduct could result in termination of your appointment with United Life in addition to serious reprimands, including fines, penalties, litigation and revocation of your agent’s license. This manual is intentionally broad in scope. Specific questions regarding procedures, forms, expected behavior, etc. should be directed to the Home Office staff. The compliance acknowledgement form included with this manual must be signed and returned to United Life as part of the compliance process. This manual will be subject to ongoing review. Changes to the manual will be sent to you as they are made. Major manual revisions will require a compliance acknowledgement form to be signed and returned to United Life.
STATEMENT OF ETHICS As a representative of United Life Insurance Company, you hold an important position of responsibility and trust. Your clients trust you to act in their best interests, and United Life trusts you to act with honesty and integrity in all of your business dealings with your clients, other agents and the Company. United Life believes it is your responsibility to: 1. Engage and conduct any business or professional activity honestly. 2. Have the knowledge, practical skill and ability to exercise thoroughness in order to demonstrate competency in insurance. 3. Exercise diligence in carrying out your responsibilities to your client and advising your client promptly of any noncompliance, error or omission you know about. 4. Keep your client’s information confidential 5. Inform your client of any potential conflict of interest, which may compromise your agent-client relationship. United Life maintains a high commitment to ethical principles. We expect our agents to sell our products to their clients with the same care and concern they would use in selling those products to their families and friends. United Life also expects those clients to receive the same high levels and standards of service. The guidelines of these expectations involve: 1. Understanding the individual client’s needs and selling products that address those needs. 2. Meeting all requirements of the law and regulations relative to sales. 3. Maintaining our insureds’ trust and building their confidence in the company and the agent with service after the sale. We must have a mutual commitment to help our clients satisfy their insurance needs with our products.
LICENSING The law requires you to have a valid state license to sell insurance products. In order to obtain a license, you must satisfy the state licensing requirements. In addition, you must be appointed by United Life Insurance Company before you may represent United Life in the sale of any of its products. United Life cannot accept any sales until the writing agent is a licensed, duly appointed agent with United Life. You must hold a current valid state license (resident or non-resident license) and an appointment prior to submitting business to our company. It is your responsibility to ensure that continuing education requirements in your state are met and that your licenses are renewed in a timely manner.
APPOINTMENT/CONTRACT United Life cannot accept any sales until the writing agent is a licensed, duly appointed agent with United Life. In order for you to write business with United Life Insurance Company, you will generally need to be contracted with the company and be appointed as representing United by any state(s) in which you will be writing business. When you are contracted with United, the person responsible will discuss with you the minimum production necessary to maintain your contract. Although these may vary among agencies based on a variety of factors, generally speaking we expect minimum production of at least 6 applications or $1000 first year commission. Failure to meet these requirements may result in our terminating the agency agreement.
COMMISSION United Life will pay commission as outlined in the Agency Contract Agreement. 1. If insurance in United Life is issued which will take the place of insurance terminated or to be terminated in United Life after the new insurance is issued, United Life reserves the right to determine the rate of commission and fees to be allowed, if any. 2. If a policy contains the privilege of conversion to a different form and such policy is converted by an agent other than the original agent, then the original agent shall forfeit all further rights to commission payable under such insurance in either its original or converted form.
ADVERTISING Any advertisement, as defined below, must be submitted to, and approved by, the Home Office prior to the advertisement being printed or used. The Home Office will review the specific advertising regulations for a particular state(s) in order to assure compliance and to avoid penalties resulting from the improper use of an advertising piece. Please remember that most states have a very broad definition of advertising that includes, but is not limited to, items set forth below. Advertising materials submitted to the Home Office will be reviewed within five (5) working days of receipt. United Life Insurance Company will work with you so the advertising can be approved in a timely manner. After suggested changes have been made, the advertisement must be submitted in its final format to the Home Office. Upon final approval, a copy of the advertising material will be returned to you. Many organizations have their own specific guidelines regarding advertising. If there are differences between United Life’s guidelines and those of another organization or governing body, the more restrictive shall apply. Approval by United Life shall not be used as satisfaction of advertising (approval) for another organization or governing body. The original final-approved version of every advertisement will be maintained in the Home Office, in accordance with state laws. United Life will not stand behind any advertisement for which prior written approval was not obtained. There are certain states and products that require an advertisement to be filed and approved by the State Department of Insurance prior to its use. The Home Office is responsible for filing and obtaining approval of all such advertisements. When state approval is required, no advertisement may be used until state approval has been obtained. The term “advertisement” in this context is used to mean material designed to create public interest in insurance products or an insurer, or to induce the public to purchase, increase, modify, reinstate or retain a policy. The definition of “advertisement” includes, but may not be limited to: 1. Printed and published material, audio visual material, and descriptive literature of an insurer used in direct mail, newspapers, magazines, radio scripts, television scripts, billboards and similar displays. 2. Descriptive literature and sales aids of all kinds issued by an insurer, agent, producer, broker or solicitor for presentation to members of the insurance buying public and including, but not limited to, circulars, leaflets, booklets, depictions, illustrations, form letters and lead-generating devices of all kinds. 3. Prepared materials for use by agents, brokers, producers and solicitors, whether prepared by the insurer or the agent, broker, producer or solicitor. 4. Material used for the training and education of an insurer’s sales personnel, agents, solicitors and brokers which is designed to be used or is used to induce the public to purchase, increase, modify, reinstate or retain a policy. 5. Material included with a policy when a policy is delivered and material used in the solicitation of renewal and reinstatements. If you have any questions or concerns about meeting advertising compliance issues, please send the advertisement in question to the Home Office for approval. Please remember that most states have a very broad definition of advertising that includes, but is not limited to, items set forth on page four (4).
SOLICITATION Training: All material used for United Life agent or product information training must be approved by the Home Office prior to its use. Training materials include, but are not limited to, videotapes, brochures, “product information” sheets, sales kits and all other “adversiting” or training materials.. Sales Presentations: Once you have obtained the appropriate state license, and have been properly appointed by United Life, you are ready to present product information. 1. First identify yourself as an insurance agent using your full name. Before completing an application for a United Life product, identify yourself as an agent appointed with United Life. 2. We expect you to conduct yourself in an ethical manner at all times when making a sales presentation. We expect you to know and comply with the
Unfair Trade Practices Act for every state with which you are licensed. We also expect you to abide by the following guidelines: A. Life, Annuity and Disability Income Sales 1. You cannot make any misrepresentative, misleading, false or deceptive statements about United Life or another company, particularly in a replacement or competitive situation. 2. You cannot use words or phrases which exaggerate any benefits or limitations, exceptions, or reductions of benefits. 3. You cannot describe any policy provision or benefit without fairly and accurately describing the limitations, exceptions or reductions of benefits. 4. You cannot use any insurance words, phrases or other terminology which might not be clearly understood by the applicant. 5. You cannot make any unfair or incomplete comparison of United Life and/ or other insurers, their financial status, policies, benefits, agents, services, method of marketing or compare unlike policies. 6. You cannot give the impression to prospective insureds that the insurance product is endorsed or accredited by any division or agency of the state or federal government or by any other entity unless such is a fact. 7. You cannot represent that the insurance product is an introductory, initial or special offer or that the applicants will receive substantial advantages given only to a specified group of individuals, unless such is a fact. 8. You are prohibited from making any statement or implication to the effect that only a specific number of policies will be sold or that it will be sold for a limited time period, unless such is fact. 9. You cannot use the existence of any state’s Guaranty Association for the purpose of inducing the purchase of insurance. B. Specific to Life and Annuity Sales 1. You cannot knowingly lead applicants to believe they will receive something other than life insurance. You must identify the product as “life insurance.” You cannot specifically refer to the product as a retirement plan. 2. You cannot identify yourself as an estate planner, financial planner, investment advisor or financial consultant unless you are so designated. 3. You cannot present policy cash values showing guaranteed and non-guaranteed elements unless these cash values are shown with equal prominence and are contained within the same policy presentation. Notations you make on any illustrations must highlight guaranteed values equally with current values. 4. You cannot compare life insurance policies or annuity policies or cash values to savings, savings accounts, stocks, bonds or any other financial instrument, or investment in such a way as may mislead a person as to the true nature of life insurance or annuities, surrender values or other policy benefits. 5. You cannot use terms such as “deposit”, “deposit premium”, “investment”, or other such misleading or confusing terms when referring to amounts which are in fact premiums for life insurance coverage or annuity coverage. 6. You cannot use life insurance indexes that are misleading to compare life insurance policies. 7. When required by law, you must obtain the appropriate state regulated disclosures for those relevant to NAIC Model Illustration regulations. C. Suitability (Appropriateness of Coverage/Transaction) In determining a prospect’s need for insurance coverage, you must fully and completely develop the appropriateness of coverage for a prospect’s needs. This is always important, but it is especially so when dealing with the insurance needs of elderly clients. You are expected to keep accurate and complete written documentation of the sale and the appropriateness. In particular where older clients are involved, it is recommended that you involve their heirs or legal/tax advisors. Most, if not all states, have adopted model regulations regarding suitability, in particular as regards annuity sales (to elderly clients). Suitability is a rapidly changing regulatory area. It is in not only the client’s best interest, but your own as well, that thorough records be kept. In some instances, Company policy may require documentation beyond statutory requirements. In those rare instances where a transaction may not appear to be in the client’s best interest, we may decline to issue the policy as applied for. D.Application The application is part of the insurance contract. We rely on the truthfulness of the answers to questions on the application, when underwriting an application. If the answers are incorrect, incomplete or untrue, United Life has the right to deny benefits or rescind coverage. Therefore, it is important that the application be filled out completely and accurately with all relevant information included. 1. An application must be completed in the presence of the applicant, using the information the applicant provides, unless specific underwriting guidelines state otherwise. Applicants should be given the opportunity to review the application before signing it. 2. All required signatures must be present on the application and the signatures must be at the appropriate location. You must witness the applicant’s signature when required by United Life underwriting requirements. 3. The applicant must initial any changes made on the application at the time the application is taken. Whiteouts or similar alterations are not acceptable and may result in a delay in processing the application. In addition, the agent may have to, upon delivery, obtain written verification of such changes. 4. Processing the application will be delayed if questions are left unanswered or if all required documents are not submitted with the application. 5. Where a conditional receipt is required, you must fully explain the terms of the conditional receipt prior to leaving it with the applicant. 6. Every applicant who signs our application form must understand all of the provisions contained on our form at the time it is signed. If it appears that an applicant is illiterate or is not fluent in English, a signed Verification of Understanding form must be submitted with the application. 7. As our clients get older, more and more are deciding to have a trust own their annuity. Or, because of advanced age, in many cases a child, grandchild or trusted advisor has been granted Power of Attorney. Each of these presents its own challenges. a. Trusts—We require a copy of those portions of the trust dealing with the designation of the trustee and successor trustee and under what circumstances they become empowered, as well as whether or not they may act individually or if multiple signatures are required. If the trust is more than three (3) years old, we may require an affidavit stating that all terms of the trust are still valid. Additionally, if a trustee attempts to make a change of ownership or beneficiary to his or her self (whether or not it may also include someone else as well), we may deny the request or require additional signatures of interested or potentially interested parties. b. Power of Attorney—When a Power of Attorney (POA) is involved in an annuity or life insurance transaction, we require proof of POA validity. A photocopy of recent POA paperwork should be submitted with any new transactions. An Affidavit of Validity of Power of Attorney (Form LIU-735) may also be required. If a POA attempts to change policy ownership or beneficiary status to his or her self, we may deny the request or require additional signatures of interested or potentially interested parties to the contract.
REPLACEMENTS/FINANCED A replacement occurs when a new policy or contract is purchased and, in connection with the sale, you discontinue making premium payments on the existing policy or contract, or an existing policy or contract is surrendered forfeited, assigned to the replacing insurer, or otherwise terminated or used in a financed purchase. A financed purchase occurs when the purchase of a new life insurance policy involves the use of funds obtained by the withdrawal or surrender of or by borrowing some or all of the policy values, including accumulated dividends, of an existing policy, to pay all or part of any premium or payment due on the new policy. A financed purchase is a replacement. A replacement/financed purchase generally means any transaction in which a new life insurance or annuity policy will be purchased and because of that purchase, an existing life insurance or annuity policy may be: (a) Lapsed, forfeited, surrendered or otherwise terminated. (b) Converted to reduced paid-up insurance, continued as extended term insurance or otherwise reduced in value by the use of non-forfeiture benefits or other policy values. (c) Amended so as to effect either a reduction in benefits or in the term for which coverage would otherwise remain in force or for which benefits would be paid. (d) Reissued with any reduction in cash values. (e) Pledged as collateral or borrowed against. (f) In any way reduced in value in order to purchase new coverage. The Unfair Trade Practices Act prohibits the twisting and churning of existing coverage. Twisting includes making false or incomplete written or oral statements for the purpose of inducing or attempting to induce the policyholder to replace an insurance policy. Most states not only preclude someone from making false or incomplete statements about not only the policies or benefits, but also about the insuring company. Churning is the practice of inducing a policyholder to purchase a new policy with the same or different company using the values of their existing coverage. The agent churns policies only to earn a new first-year commission. Churning results in no benefit to the policyholder. Be careful when dealing with prospects who may be considering replacing their current coverage. The following suggestions will help in a replacement situation: 1. Establish the client’s financial needs. 2. Propose what is best for your client’s financial needs. 3. Compare existing and proposed coverage to determine how those needs are best met. 4. Exercise your fiduciary responsibility to the client. 5. Complete all replacement forms as appropriate. 6. Keep notes on your conversations with clients. 7. Be familiar with Unfair Trade Practices and replacement regulations in your state. 8. You are expected to keep accurate and complete written documentation of the sale and the appropriateness. In particular where older clients are involved, it is recommended that you involve their heirs or legal/tax advisors.
NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS (NAIC)LIFE INSURANCE ILLUSTRATIONS MODEL REGULATIONS Sales illustrations are designed to illustrate how a policy’s values and premium will perform over time. Sales illustrations can be misleading if not presented in a fair and accurate manner. The NAIC has adopted the Life Insurance Illustrations Model Regulation which contains detailed rules for the use of life insurance policy illustrations and prohibits producers from using any illustration that does not comply with its requirements. The Model Regulation has three basic requirements regarding the illustrations: 1. Specifies the general terms to be used in an illustration. 2. Outlines the illustration’s required format. 3. Defines the allowable values that can be shown in the illustration. The Model Regulation also requires the producer and the company to strictly adhere to delivery and retention rules with regard to illustrations generated. The Model Regulation has been adopted by a number of states and is expected to be adopted by more states in the future. We expect you to be familiar with and follow the guidelines adopted by every state in which you do business. If there are differences between United Life’s guidelines and those of another organization or governing body, the more restrictive shall apply.
CLAIMS In order for United Life Insurance Company to comply with the requirement of the Unfair Claims Settlement Practices Act, which all states have adopted in some form, you are required to follow certain procedures so the Home Office can process claims in an efficient, timely and compliant manner. A. Proper Claims Practice: 1. All claim questions, material and information given to you by the policyholder must be reported and/or submitted to the Home Office within 24 hours of receipt of the information. All notifications of claims are recorded in order to assure that United Life complies with state regulatory requirements. 2. You must not commit United Life to the payment of a claim by promising that a claimant will receive a certain benefit amount or coverage. The claimant must be referred to the Home Office concerning these matters. 3. All claim forms must be ordered from the Home Office. 4. All claim forms must be fully completed by the claimant and returned to United Life’s Home Office by the claimant or you. (a) It is the claimant’s responsibility to collect and submit all information requested by the Home Office Claims Department. This includes taking the “Attending Physicians Statement” form to the policyholder’s physician and obtaining any requested information. Any questions the claimant may have during this process should be directed to the Home Office. B. Improper Claims Practice We consider that any of the following acts constitute an improper claims practice: 1. Knowingly misrepresenting to claimants and insureds relevant facts or policy provisions relating to the coverage at issue. 2. Failing to promptly inform United Life’s Home Office of pertinent communications with respect to claims arising under United Life’s policies. 3. Attempting to settle a claim instead of referring the claimant to United Life’s Home Office. 4. Advising the claimant to submit false claims to the company. 5. Altering a claim form or other forms submitted with a claim. FRAUD Fraud is defined as the intentional perversion of truth in order to induce another to part with something of value or surrender a legal right. Insurance fraud is any fraud that involves an insurance company, whether committed by consumers, insurance company employees, agents, health care providers or anyone else connected with an insurance transaction. Fraud can occur as part of the applications process or as part of the claims process. Insurance fraud is a crime in all states and a felony in many states. Any guilty party may be subject to fines and imprisonment.
PRIVACY SECTION United Life Insurance Company requires that you and your employees maintain a level of confidentiality comparable to that as we require of our own employees. As an agent representing United, you may have access to non-public and/or sensitive information that may not be shared or distributed except as necessary to perform the normal course of business with United Life Insurance Company. United Life expects any information that may be collected, received or maintained in the normal course of business to be safeguarded according to strict standards of security and confidentiality. Access to non-public and/or sensitive information shall be restricted to only those persons in the agency who require same in the normal course of business. Except as may be required or permitted by law or regulators, non-public and/or sensitive information concerning our insureds and others we serve will not be disclosed externally to any third party unless the affected individual is first previously informed of the intended disclosure and has authorized it. Agents or other agency employees who abuse these policies may cause action to be brought by United against the agent or agency. This may include termination of the Agency Agreement with United.
ANTI-MONEY LAUNDERING Federal Law and regulations require that United Life Insurance Company(ULIC) have in place certain written policies procedures and practices to preclude the company and its products from being used to facilitate money-laundering and more specifically the financing of terrorist activities. To this end, ULIC must be able to provide documentation that its agents are aware of the best practices that a person might reasonably be expected to follow while representing the company. It is likely that you have already satisfied any training requirements through your affiliation with (an)other organization(s). There is no training specific to ULIC. From time to time ULIC may need to contact you concerning certain transactions as they might be affected by the Federal Anti-Money Laundering legislation. Your assistance and understanding will be appreciated. Additionally, to this end, and as noted on page 7, the agent should be present when the applicant compeltes the applicaiton. Applicant is technically defined as the owner of the policy as that is the person that controls the distribution of present and future benefits. Further, the applicant, if not personally known to the agent, should provide identification that can be appended to the agent’s file as well as our own.
COMPLAINT HANDLING PROCEDURE A company-wide system will track complaints by state, agent and nature of complaint in order to detect, correct and monitor problem areas or trends. An agent-specific trend may result in a company reprimand or possible termination of contract. Consumer complaints will be handled by the appropriate Home Office department. Insurance department complaints will be handled in the Home Office by the corporate officer so designated to handle such complaints. (a) If the basis for a complaint appears to be a violation of a state’s Unfair Trade Practices, United Life will send you a notification advising that we have received the complaint, remind you of the Unfair Trade Practices Act and caution that United Life Insurance Company expects you, as an agent representing our Company, to comply with those practices. (b) Most states may require your statement related to each complaint (depending upon its nature). The state may make the request to you directly or through our Home Office. Most states have requirements that insurers respond to them within a certain period of time, which may vary from seven (7) to 15 days. Therefore, when your statement is requested, it must be signed, dated and returned promptly within the time frame required. If you respond directly to the state, you must furnish United Life with a copy of the state request and your response.
DISCIPLINARY ACTION This manual contains rules and procedures which, under the terms of your agreement with United Life, you are expected to follow while acting as an appointed representative of the Company. Failure to comply with the terms outlined in this manual will subject you to disciplinary action. Such action could include chargeback of commissions, cancellation of agent appointment with United Life, or any unlawful actions reported to the appropriate insurance departments. Forbearance or neglect of United Life to insist upon compliance with the provisions of this manual or the rules and regulations of the Company shall not be construed as or constitute a waiver thereof.
MISCELLANEOUS With respect to Company-Agent rights and obligations for which no provision is made in this manual or in the Agency Contract Agreement, the Agent agrees to be governed by such rules as United Life has established or may establish. The Agent shall be liable to United Life for damage or loss sustained by it as a result of any unauthorized acts of the Agent. The Agent specifically agrees to indemnify United Life from liability of any type for judgments, litigation costs, attorney’s fees, fines, penalties or other liabilities incurred by United Life as a result of such unauthorized acts. Forbearance or neglect of United Life to insist upon compliance by the Agent with the provisions of this manual or the rules and regulations of the Company shall not be construed as or constitute a waiver thereof.