Texas Life Agent Practice Exam

To sell variable life insurance, which registration is required?

1. The SEC

2. NASD (FINRA)

3. State Insurance Department

4. Fidelity

The correct answer is: NASD (FINRA)

To sell variable life insurance, it is necessary to have registration with the Financial Industry Regulatory Authority (FINRA), previously known as the National Association of Securities Dealers (NASD). This requirement is in place because variable life insurance policies are considered securities due to their investment components. In addition to having the appropriate state insurance license to sell life insurance, agents must pass the necessary exams to become registered representatives with FINRA. This dual licensing ensures that agents are knowledgeable about both the insurance and investment aspects of the product, allowing them to provide informed advice to clients about the risks and benefits associated with variable life insurance. The emphasis on regulatory oversight highlights the complexity of these financial products and the protection of consumer interests.