BUSINESS PRACTICES and COMPLIANCE GUIDE - …

1 BUSINESS PRACTICES AND COMPLIANCE GUIDE 02/14/2017 BUSINESS PRACTICES and COMPLIANCE GUIDE transcript Welcome to the Nationwide Life Companies BUSINESS PRACTICES and COMPLIANCE GUIDE . Click next to begin. Welcome! You have an important role to play, not only in the success of your BUSINESS , but that of the Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company, collectively known as the Nationwide Life Companies. The Nationwide life companies distribute financial services products and solutions through Insurance Professionals, like you. And, in order to be successful, you have to understand the regulatory requirements and how the requirements impact your BUSINESS . The BUSINESS PRACTICES and COMPLIANCE GUIDE , or BPCG, can help you understand both of these! But, what is the BPCG? The BPCG establishes policies to achieve COMPLIANCE with state and federal rules and regulations and to detect and prevent violations of those rules and regulations and the internal policies and procedures of the Nationwide Life Companies.

2 It is a GUIDE to conduct your daily insurance BUSINESS . Let s get started! In this lesson, you will learn how to do BUSINESS with Nationwide Life Companies in a compliant manner, including: The guidelines and expectations outlined in the BUSINESS PRACTICES and COMPLIANCE GUIDE ( BPCG ) And also about the marketing concepts or sales activities that are considered best PRACTICES at Nationwide, such as understanding prohibited activities. Let s talk about the BPCG GUIDE first. Click next to begin. There are many topics within the GUIDE designed to help you with your daily insurance BUSINESS . We will learn about each one through a scenario. We will start with Licensing and Appointments. Click next to begin. Listen to the scenario and then answer the question on the right. BUSINESS PRACTICES AND COMPLIANCE GUIDE 02/14/2017 Jenna has a valid Ohio state insurance license.

3 And, she is appointed to sell Nationwide Life products. Can Jenna solicit insurance BUSINESS for Nationwide in Ohio? You can also read this policy, by selecting the blue icon on the right. Then, answer the question. Yes! Jenna has a valid state insurance license in Ohio and is also properly appointed with Nationwide. Each state issues its own insurance licenses for specified line(s) of BUSINESS , such as life, accident and health, variable contracts, and long-term care. Let s build on our scenario. A client refers Jenna to a family member named Sam. Sam lives in Indiana. Can Jenna discuss a specific life product with Sam? That is correct. If Jenna would like to discuss a specific life product with Sam, she would need a non-resident Indiana license. She already has a valid Ohio license, which is in her resident state. There is one last section to this scenario.

4 Jenna has an appointment in Indiana due to her previous employment with another agency. Will Jenna s appointment with a previous employer allow her to discuss a Nationwide Life Product with Sam? That s right. Jenna s appointment with a previous employer is not valid since she no longer works there. Once an Insurance Professional leaves an agency, he or she must obtain new appointments through the Nationwide Life Companies. Great job! Now, try this question. Once Jenna has a valid license and has been appointed by Nationwide is she a permanent agent? Nationwide reserves the right to terminate the appointment for any violation of the policies or procedures. You can find more about termination in Section of the BPCG. BUSINESS PRACTICES AND COMPLIANCE GUIDE 02/14/2017 That was a lot of information. Make sure that you: Are appropriately licensed in every state in which you conduct insurance BUSINESS Are licensed in the state where solicitation occurs and where the application is completed and executed Maintain a valid insurance license in your resident state as well as a non-resident license in any other state(s) as appropriate And, that you re appointed with Nationwide The next policy we are going to learn about is Professional Designations.

5 Click next. In this scenario, meet Joe. Joe would like to add professional designations to his marketing materials to help solicit BUSINESS . However, depending on the state, or states, that Joe is licensed in; his designations may or may not be approved for use. Let s learn more. In this scenario, Joe has a valid state insurance license in Pennsylvania. And, He has completed all requirements for the Chartered Life Underwriter, or CLU designation and CLU is approved in Pennsylvania. Can Joe use this designation on his materials? To read this policy, select the book icon. Then answer the question. Joe must comply with the applicable state laws and regulations regarding professional designations in his state. Since the CLU designation is approved in Pennsylvania, and Joe has earned the designation, he can use it for marketing purposes and in conversations.

6 Joe is also a certified financial planner and has a CFP professional designation. He has delayed completing the continuing education requirements of the CFP designation. Since he is so close to completing the courses, can Joe use the CFP designation in his marketing materials and conversations? BUSINESS PRACTICES AND COMPLIANCE GUIDE 02/14/2017 No. Joe must be current with the designations continuing requirements and cannot use a designation in a false manner. He may be subject to disciplinary action by the Nationwide Life Companies including, but not limited to, termination of your appointment with Nationwide. Remember the following: Make sure that your professional designation is legal in the state you are licensed in before using it. Do not use a professional designation unless you have completed all requirements and are current with the designations continuing requirements.

7 And, Make sure your designated broker-dealer firm has approved the professional designation. The next policy is Solicitation and selling to seniors. In this scenario, meet Henry. Henry knows that Insurance solicitation occurs anytime a specific insurance product is discussed with a client. With the aging population, it is very important to select the most appropriate product using due diligence and needs assessment. Let s learn more. What do you think? Before Henry even calls a potential customer, what must he check first? It is required that the Nationwide insurance product is approved in the client s resident state and that the agent is licensed and appointed in that state, even if he doesn t reside there. In this scenario: Henry is licensed in Ohio to sell Nationwide insurance. John, a 70 year old gentleman who resides in Ohio, arrives at the agency to discuss an annuity policy.

8 Can Henry solicit BUSINESS from John? Henry is licensed to sell Nationwide insurance policies in Ohio. John resides in Ohio BUSINESS PRACTICES AND COMPLIANCE GUIDE 02/14/2017 also. Yes, Henry can solicit BUSINESS from John. Henry learns that John works part-time at a local hardware store after retiring from a large corporation. John has a health care plan and says that he is rarely sick. He plans to work as long as he can. Can Henry sell John an annuity product? Henry hasn t learned enough about John. When selling to seniors, a product must be a good fit. Henry should ask more questions like these. When interacting with the elderly, be aware of the impact that the decline of a consumer s physical and cognitive functionality can have on his or her ability to make financial decisions. These suggestions may help: Consult with the appropriate Professionals to prepare documents ( , Will, Power of Attorney, Health Care Proxy, Living Will).

9 Designate a trusted contact for the account, and Invite a friend or family member to accompany the consumer to appointments. Is this True or False? There has been a growing regulatory concern about the increase of seminars targeting senior citizens. While seminars may be used as a legitimate marketing tool, it is your responsibility to make sure it is positioned appropriately with full transparency regarding the purpose of the event and that the marketing and sales tactics are ethical and compliant. Remember! Insurance solicitation occurs anytime a specific insurance product is discussed with a client. Make sure that you ask enough questions to identify the best product for the aging consumer. A list of questions can be found in Selling to Seniors of the BPCG. Let s look at Prohibited forms of payment and transfers next. BUSINESS PRACTICES AND COMPLIANCE GUIDE 02/14/2017 Anna has been a licensed agent for several years.

10 She knows that there are certain payment types that are prohibited by Nationwide. She also knows that it is her job to identify suspicious activity in order to prevent anti-money laundering and fraud. Let s learn more. In this scenario: Anna meets with an applicant who wants to purchase two $5 million life insurance policies for her spouse and also for her daughter. She would like to be the beneficiary on both. She wants to pay the premiums with cash and several third party checks, totaling $20,000. Is this transaction a red flag? Cash is a prohibited payment type and third party checks are only acceptable from the Owner/Applicant. Anna should sense a red flag when the client tried to use multiple forms of payment. Federal law requires Anna to report cash transactions to Nationwide when the total payment exceeds $10,000. The applicant tells Anna that another agent helped her get around the reporting requirements in a previous transaction.