Friday, November 8, 2013

Update on Texas Insurance Licensing

This blog has noted before curious data from Texas that suggests the state was not doing enough to ensure entry into the financial profession was free and fair.  As a follow-up, there is some good news coming out of Texas.  The state's pass rate for the life insurance licensing exam is up to the mid-60s this year.  The state will publish a demographic report next month, and we will get a real understanding of how how much progress is being made.

 One unintended consequence of allowing barriers to entry to remain in the financial profession is that consumers have a limited pool of professionals through which they can access the advice and tools necessary to achieve financial security. It is critical that every community has access to financial advice and tools.

As this Blog stated in its earlier Texas post:
Given the CFS mission to help ensure that working-class Americans have access to financial tools and advice – including agents who represent a vital link to products like IRAs and life insurance, CFS has done a fair amount of work on how financial professionals are licensed and get into the business. That work has uncovered instances where the evidence suggests that state licensing requirements, particularly licensing exams, may be serving as an unfair and unnecessary barrier to entry into the profession - - to the detriment of consumers. While licensing is important and meant to protect consumers, consumers are not protected if the pool of professionals on which they can rely is artificially limited.