Protective Life wants to make sure you stay informed and compliant regarding rules and regulations within our industry. Please review the information below, which may affect the processing of your submitted business with us.
A “non-resident sale” (a.k.a. “cross-border sale”) occurs whenever a customer buys a life insurance policy or an annuity contract outside his or her state of residence. There is increased focus among state insurance departments concerning transactions in which residents of their states are sold insurance products outside their jurisdiction. The insurance departments want to protect citizens from purchasing products that have not been approved in their respective states and to ensure that only properly licensed agents and companies are doing business with their residents. In fact, certain state insurance departments prohibit cross-border sales to residents of their states regardless of the circumstances or the connection to the non-resident state.
Effective 2/1/2019, we are not able to accept applications for cross-border sales to residents of the following states:
Arkansas, Idaho, Massachusetts, Minnesota, Mississippi, New York*, Utah, Washington, and Wisconsin
Even in states that allow cross-border sales, there should be a rational connection between the applicant/owner and the non-resident state in which the sale occurs (such as place of employment, vacation home, etc.). The applicant/owner should not be in the non-resident state at the time of application solely for the purpose of purchasing a product.
Likewise if you sell products in jurisdictions outside of your own state of residence, you must maintain the appropriate non-resident license(s) and only sell products approved in those non-resident states. In addition, you must be familiar and comply with all rules and regulations in each state for which a non-resident license is held.
General rules regarding non-resident sales:
Do not represent yourself as an agent in any state in which you are not licensed
Verify product and forms involved are approved/available for sale in the applicant’s state of residence
Do not advise a prospect to travel to another state due to product availability or product/rate differences
Do not act as a proxy for another agent who is not properly licensed in the state of solicitation and sale
Maintain clear documentation as to why a sale occurred in a non-resident state
For trust owned policies, the contract state and application form must be based on the trust situs state
For corporate/business owned policies, contract and application must be based on the business address
All application forms should be signed in the applicant’s state of residence
The solicitation, application, premium collection, and policy delivery must all occur in the same state
For any non-resident sale, a Cross-Border Sales Certification must be submitted with the application. For LIFE, this will be done via email exchange with the producer. For ANNUITY, this form will be required.
If you have questions about the particular rules for your circumstance, please do not hesitate to contact us.
*New York is still subject to the current exception process and Non-Licensed Territory Declaration (NY-NLTD)

Securities offered through The Leaders Group, Inc., Member FINRA/SIPC, 26 West Dry Creek Circle, Suite 800, Littleton, CO 80120 (303) 797-9080.

National Brokerage Associates, Inc. is not affiliated with The Leaders Group, Inc.

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