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§ 625-3. Unfair financial planning practices

Purdon's Pennsylvania Statutes and Consolidated StatutesTitle 40 P.S. Insurance

Purdon's Pennsylvania Statutes and Consolidated Statutes
Title 40 P.S. Insurance (Refs & Annos)
Chapter 2. Insurance Companies (Refs & Annos)
Article IV-a. Life and Endowment Insurance and Annuities
40 P.S. § 625-3
§ 625-3. Unfair financial planning practices
Currentness
(a) No producers shall hold themselves out, directly or indirectly, to the public as a financial planner, investment adviser, consultant, financial counselor or any other specialist engaged in the business of giving financial planning or advice relating to investments, insurance, real estate, tax matters or trust and estate matters when that person is in fact engaged only in the sale of life or annuity insurance policies. This subsection shall not limit persons who hold some form of formally recognized financial planning or consultant designation from using this designation when they are only selling insurance. However, these persons may not charge an additional fee for services that are customarily associated with the solicitation, negotiation or servicing of policies.
(b)(1) Producers shall not engage in the business of financial planning without disclosing to the client prior to the execution of the agreement provided for in subsection (c) or solicitation of the sale of a product or service that:
(i) he is also an insurance salesperson; and
(ii) a commission for the sale of an insurance product will be received from an insurer apart from a fee for financial planning, if such is the case.
(2) The disclosure requirement under this subsection may be met by including it in any disclosure required by Federal or State securities law.
(c)(1) Producers shall not charge fees, other than commissions, for financial planning unless such fees are based upon a written agreement signed by the party to be charged in advance of the performance of the services under the agreement. A copy of the agreement must be provided to the party to be charged at the time the agreement is signed by that party. The written agreement must include, at a minimum:
(i) A general description of the services for which the fee is to be charged.
(ii) The amount of the fee to be charged or how it will be determined or calculated.
(iii) The fact that the client is under no obligation to purchase any insurance product through the insurance agent, broker or consultant.
(2) The producers shall retain a copy of the agreement for not less than three (3) years after completion of services, and a copy shall be available to the department upon request.

Credits

1921, May 17, P.L. 682, No. 284, § 403-A, added 1996, Dec. 18, P.L. 1003, No. 154, § 3, effective July 1, 1997.
40 P.S. § 625-3, PA ST 40 P.S. § 625-3
Current through Act 10 of the 2024 Regular Session. Some statute sections may be more current, see credits for details.
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