Planners don’t have any easy time of it these
days. And if tough contract negotiations, complex
logistics and increasing scrutiny by procurement aren’t enough of a
challenge, insurance meeting planners have yet another minefield to
cross: the threat that their incentive programs will run afoul of
the watchdogs at the National Association of Securities
Even insurance industry planners who don’t organize incentive
sales contests must follow rules set forth by New York City-based
NASD for training and education meetings, gift giving,
entertainment expenses and record keeping.
“We follow NASD rules and regulations in that we don’t offer
tours or pay for spouse travel or give any incentive-type gifts,”
says Sharon Chapman, CMP, CMM, travel and corporate events planner
with the Berkshire Life Insurance Company of America, based in
Pittsfield, Mass. “And we do the mandatory number of hours of
business meetings throughout the day. In other words, our business
meetings are meetings.”
While Chapman is upfront about adherence to NASD requirements,
other planners contacted by M&C for this story would
not give their names for fear of attracting undue attention from
the regulatory body. Which leads to the inevitable question: Just
what or who is NASD, anyway?
An appetite for discipline
NASD isn’t a government agency; rather, it is the biggest
private-sector provider of regulatory services in the world,
working at the behest of the Securities and Exchange Commission,
the U.S. government’s regulator of securities brokers nationwide.
(A “security” is a stock certificate or bond, held as evidence of
debt or of ownership, that may be traded in a market.)
With a $500 million annual budget and 2,000 employees, NASD
oversees thousands of brokerage firms and registered securities
dealers. The organization licenses individuals and firms and writes
the rules that govern their activities. In recent years, however,
the agency has become a very aggressive disciplinarian.
“Before, it was sort of the fox guarding the chicken coup, but
now they have toughened up,” says Jonathan T. Howe, Esq., a
contributing editor of M&C and Chicago-based senior partner in
the law firm of Howe & Hutton Ltd., which specializes in
meetings, travel and hospitality law. And in this case, “toughened
up” means doling out punishment.
“NASD decided it would rather be in charge of discipline than
let the government be the sole source,” Howe continues. “Now, about
once a month, you pick up The Wall Street Journal, and there is a
full-page article about people who have been disciplined.”
For meeting planners to be subject to NASD oversight, they must
work at companies that sell variable life and annuity insurance
products. These give the investor an opportunity to gain from their
potential capital appreciation and also subject the investor to
risks from the marketplace the characteristics of a security.
To sell a security or a security-like product, “you have to be
a broker/dealer,” explains Larry Kosciulek, associate director for
investment companies regulation for NASD. “All broker/dealers in
the United States who have retail accounts have to be members of
NASD.” As a result, that agency performs federal oversight
affecting meeting planners at scores of companies nationwide.