Necessary Information and Announcements

Copyrighted Material

  United Insurance Educators, Inc. (www.uiece.com) copyrights all their courses and this one is no exception.  This course may not be used for selling any product.  It may not be used as any type of selling material.  This course does not intend to offer industry or legal advice.  It may not be copied or used in any manner other than as continuing education credits for the state of California through United Insurance Educators, Inc.  We retain all rights to this course. 

A Legal Requirement

  Section 1749.8 of the California Insurance Code took effect on January 1, 2005.  This law states that life agents who sell annuity products must first complete eight hours of annuity training that is approved by the California Department of Insurance (CDI) followed by four hours of CDI approved annuity training each license renewal period thereafter.  As the name of this course indicates, this course is the four-hour refresher course not the initial eight-hour annuity course.  We do also have that required course, so if you have received this in error or ordered it in error please contact us immediately at 1-800-735-1155.

  This course is also available online at www.uiece.com.  You may complete the test online if you prefer even if you originally ordered a book and test through the mail.  Both the book and test are online.

Cheating is a Crime in California

  You must complete your test without help from any other person or entity.  It is not only unethical to copy someone elses work; it is also illegal under California requirements.  Furthermore, UIE expects each agent to complete his or her own work; we cannot issue credits under any other circumstance.  If we feel an agent has copied the work of another we will report it to Californias Insurance Department.

A December 2005 California notice states:

TO:             All Admitted Insurance and Other Interested Parties

Subject:     BEWARE!!!  Cheating is a Crime . . .

Assembly Bill 729 (Koretz, Chapter 312, Statutes of 2005), was signed into law on September 22, 2005.  Effective January 1, 2006, this bill states that license applicants who willfully cheat or subvert a license examination will be in violation of the law as per Section 1681.5 of the California Insurance Code.  Each cheating incident will be investigated by the California Department of Insurance (CDI).  If the applicant is found guilty of cheating on the examination, he or she will be convicted of a misdemeanor punishable by a fine not exceeding ten thousand dollars ($10,000) or by imprisonment, not to exceed one year (Section 1681.5 [b] of the California Insurance Code).

  The Insurance Commissioner can bar any candidate caught cheating from taking any examination and from holding an active license under any provision of this code for a period of five years.  If you are not sure how an exam should be completed or if another person is urging you to do something you feel is not ethical please contact your Department of Insurance at 1-800-967-9331.  This is your profession, your livelihood.  Lets give it honor.

Seek Out Professional Groups

  Agents who belong to a professional group have an advantage over agents who do not.  They are more likely to be exposed to various ideas, new trends, industry warnings, or other information that the lone agent may not receive.  Therefore, agents who work mostly alone must take great care to read everything they can about the insurance industry, including company brochures, industry magazines, and consumer articles.  Doing so can only help the agent.

Know Appropriate Annuity Use

  Annuities are great in many circumstances but like all investments, they arent right for everyone or every circumstance.  Especially older individuals may want to use caution when considering the purchase of an annuity.  Older Americans have fewer years to make up for a mistake.  If care is used when selecting an annuity product it can greatly benefit the retirement income of an individual.  The greatest challenge is deciding whether one is in the half of the retired population that will live longer than statistically expected or less.  Lifetime annuities do the most good for those that live longer since they will then collect more than they paid into their contract.  In some cases, they may collect dramatically more.

  There are some that would have us believe annuity sales are less than honorable.  If that is the case, then they are including annuity salespeople in many areas not normally considered: pension organizers, Social Security, and even lottery programs.  All of these (plus others you may think of) deal with some form of annuity product.  Just as money is neither good nor bad, annuities are neither good nor bad.  Money can be used to help many people or it can bring out greed in some, causing pain and unhappiness.  It is not the money that is the problem but rather the individual involved.  So it is with annuities.  They have the ability to provide lifetime income, financially protect a beneficiary, or set up a specific fund.  In the wrong situation, they can rob an individual of needed liquid assets, cause needless expense (surrender penalties), or allow inflation to rob the annuitant of spending power.

  As the author of this course, I consider annuities a valuable estate-planning tool when used effectively, but I do not believe that agents should place an annuity in every home.  The existence of money (usually in a CD) does not automatically mean an annuity is appropriate.  Agents must honestly present annuities so that consumers can make educated decisions.  In many cases, it is advisable to bring in more than the potential annuitant during a presentation (usually children).

  All types of financial sales have the potential of legal lawsuits and this is certainly true of annuity sales.  Those who profess to be financial planners as well as agents place themselves in the greatest legal danger.  Many attorneys recommend that agents incorporate to provide themselves with some measure of protection.  This does not mean that we believe the agent is misrepresenting their products; it is simply an observation.  We recommend that all agents, regardless of the products they sell, consult with his or her personal attorney to discuss ways of protecting him or herself financially.  Its a jungle out there.  Be educated, be cautious, and be ethical.  Its your name and reputation on line.

Harry Bobs

End of Introduction