5 Questions on Compliance for Cailie Currin

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What can you tell our readers about the SEC and FINRA’s warnings about helping clients with IRA rollovers?

To lay the foundation for the answer to this question, it is important to know that the SEC and FINRA’s published examination priorities for 2014 included a statement that these agencies concur with a GAO report. This report stated that investors may be misled about the benefits of rolling over 401(k) assets to an IRA. In addition, FINRA issued a Regulatory Notice on this topic in December 2013. FINRA has indicated it will be looking at marketing materials and providing supervision with respect to rollovers and IRAs. It is a pretty clear warning to all securities-licensed individuals that this is on the radar of federal regulators.

This means that these transactions may be subject to scrutiny by federal regulators looking for potential conflicts of interest, suitability and fair dealing rules, supervision, training and communication with the public. They can also be subject to review by state securities and insurance regulators because they are prime targets for source of funds and suitability review.

Of course, this doesn’t mean that rollovers should not be recommended by those appropriately licensed, but it does mean that it is essential to follow the best practices with respect to the many standards that may apply to any given transaction. Those who undertake a concentrated effort to target this market likely face more exposure and therefore need to be that much more careful.

What is the most common mistake you see agents make when it comes to compliance issues?

I would have to say the most common mistake is a very natural one. Many of the producers we talk to bring their experience to the discussion. They point out that they have been doing things “this way,” whatever this way is, for many years and no one has ever filed a complaint and no regulator has ever come knocking, so it must be okay.

It can be hard to break through this experience to say that they may have been lucky to date, but that many times luck comes to an end. I am very conscious of the fact that a producer’s livelihood is on the line and that I need to find a way to make them understand what is really at stake despite their experience to the contrary, and their luck to the contrary. They often choose to continue to do what they have always done even when it is an apparent violation of applicable regulations.

Are there things marketing organizations can do to help agents better mitigate risks?

Absolutely. I think more and more producers will be looking for compliance support from marketing organizations because they have the resources to provide it. Keeping up with regulatory requirements and changes takes time and it’s expertise most agents don’t have. NAFA’s Annuity Outlook has excellent information on new developments at both the state and federal levels, and it is a great resource, but there is just so much happening and it can be hard to figure out how the various regulations actually apply to day-to-day business.

I think that the next step, from information to practical application, might be the most important compliance-related service a marketing organization can provide. IMOs that can find a way to drip compliance content and make clear, in simple and understandable ways, how it applies to agents’ day-to-day business, will be offering a benefit that is not generally available. This benefit will be increasingly valuable as the regulatory environment becomes more demanding on agents.

What are some of the biggest risks/challenges to life licensed agents selling annuities today, when it comes to compliance and suitability?

I think the biggest risks/challenges relate to the degree to which the standards can be vague and constantly evolving. It is much easier to evaluate a transaction after the fact and with information about what happened after the sale. An agent has to make recommendations based on what he or she knows at that point, but if regulators ever look at the transaction, they have the benefit of hindsight.

For that reason, it is so important to follow a clear set of policies and procedures so that if a recommendation is looked at after-the-fact, it is seen within a context that demonstrates the agents’ commitment to compliance. Then, even if there is a problem identified with a particular transaction, it shows up as an outlier – the exception, rather than the agent’s normal practice.

Any added guidance you would like to share with financial professionals selling annuities?

Financial professionals understandably spend a lot of time and money learning to sell annuities more effectively and grow their business. My job and my focus are to try and get them to also think about protecting their business. This is what compliance is all about. When I raise a compliance issue, it is because I want to be sure that they get to keep what they build.

My final guidance here would be to listen to compliance advice with an open mind, and to understand that it is offered with intent only to protect a valuable business. I recognize that a producer or marketing organization may elect to make a business decision that I disagree with, and this is fine with me. I am very comfortable with that choice when I feel there has been an educated decision to do so. When it is a knee jerk rejection from compliance advice, I worry – a lot. Don’t do that. Listen, think about it, and make an educated decision that is consistent with the business you want to run and the business you want to keep for a long time.


Cailie Currin, Esq. President & CEO, Currin Compliance Services LLC Cailie never anticipated that she would have passion for insurance compliance. When she interviewed at the then NYS Insurance Department, it was the longevity of the attorneys on staff there that impressed her – she thought there must be something about the work that was not immediately evident. There was and she found the work a great fit for her too, even though she decided to leave state service for the private sector. While she worked at law firms and in-house at a major life insurer, she found her true calling as a small business owner and consultant. As the business has grown, her pleasure with the mix of work, both management and direct compliance consulting, has become clearer. Cailie also serves as Past President of the New England Chapter of AICP and is on the board of directors for IAdCA.

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