Variable Annuities And Mutual Funds

Because variable annuities and mutual funds come under the federal security laws, their distribution is to some extent federally controlled. The controls of direct concern to insurance agents relate to specific licensing requirements. The main requirement is that an insurance agent must pass an examination developed and administered by the National Association of Securities Dealers if he wishes to sell variable annuities. If the insurance agent wishes to market mutual funds, he must pass a separate examination also administered by the NASD. The difficulty of the examination depends upon whether the insurance agent desires to be a registered representative or a principal. In essence, a principal has more responsibility and authority in the distribution of mutual funds and thus must pass a somewhat more difficult examination.