Proper Identification by Insurance Producers

Vermont Insurance Division

BULLETIN 22: Proper Identification by Insurance Producers

December 16, 1974

The use by life insurance agents and brokers on business cards, stationery and other

printed material and in verbal presentations of titles such as financial planner, fiscal

adviser, investment counselor, financial analyst, and estate planner and other titles which

tend to lead prospective insureds to believe they are purchasing something other than

insurance, is becoming increasingly prevalent in Vermont and is a matter of concern to

this department.

It is also the opinion of this department that other titles not described above, used in life

or in other lines of insurance, although not in themselves deceptive, are misleading unless

all material using the term also contains the designation insurance agent or broker or life

insurance agent or broker at least as prominently as the term in question. The term estate

planner is misleading unless it is clearly revealed in context that the estate planning

service is offered in conjunction with the sales of life insurance products.

In addition, Section 4802 of Title 8 which became effective July 1, 1974 provides for the

licensing of insurance consultants. Persons who are not licensed by this department as

consultants may not hold themselves out to the public in any manner as consultants. This

includes the use of the word consultant in a business title, or on any business cards,

stationery, or other printed materials as well as verbal presentations. Section 4802 also

prohibits anyone from holding an agent's or broker's license simultaneously with a

consultant's license. The law does permit an agent or broker to charge a fee for his advice

as long as he enters into a prior written agreement with the policyholder, client, or other

member of the public (4724(14))

cards,

stationery, or other printed materials as well as verbal presentations. Section 4802 also

prohibits anyone from holding an agent's or broker's license simultaneously with a

consultant's license. The law does permit an agent or broker to charge a fee for his advice

as long as he enters into a prior written agreement with the policyholder, client, or other

member of the public (4724(14)).

Section 4724 entitled, Unfair Methods of Competition or Unfair or Deceptive Acts or

Practices Defined makes it an unfair trade practice for any person to offer his services to

the public in such a way as to mislead or fail to adequately disclose to the public the true

nature of the services offered. It is the opinion of this department that the practices

described above are encompassed within the Unfair and Deceptive Acts or Practices as

defined in that section. The Department of Banking and Insurance will apply the

sanctions of the Unfair or Deceptive Insurance Practices Act (Chapter 129 of Title 8 and

Chapter 131 of Title 8) when such practices by agents or brokers are detected and proven.

It shall be the responsibility of insurance companies to instruct their agents and ensure

their compliance with this bulletin.

James A. Guest

COMMISSIONER OF BANKING AND INSURANCE