Which statement about licensing for variable contracts is FALSE?

Which statement about licensing for variable contracts is FALSE?

• A. A registered representative may sell variable contracts if properly registered
• B. The agent must be properly registered with the SEC/FINRA as appropriate
• C. An agent must be licensed as a Life agent in order to sell a registered Variable contract
• D. Life Insurance license alone does not cover variable products

Answer: (C)

Variable contracts are securities, so selling them requires dual licensing: you must hold the appropriate life insurance license and also be properly registered as a securities representative with the SEC/FINRA and be appointed by a registered broker-dealer. Life license alone does not cover the sale of variable products, because the securities component brings in the regulatory requirement for securities registration. Therefore, saying that an agent must be licensed only as a Life agent to sell a registered variable contract is not correct—the securities licensing and registration are also required. This is why the statement is false.

Variable contracts are securities, so selling them requires dual licensing: you must hold the appropriate life insurance license and also be properly registered as a securities representative with the SEC/FINRA and be appointed by a registered broker-dealer. Life license alone does not cover the sale of variable products, because the securities component brings in the regulatory requirement for securities registration. Therefore, saying that an agent must be licensed only as a Life agent to sell a registered variable contract is not correct—the securities licensing and registration are also required. This is why the statement is false.