The Kentucky Department of Insurance is reminding insurance agents to be careful when advising clients on securities transactions.
State law requires that investment advisors be registered with the state. And when an insurance agent advises a consumer to “sell, surrender, roll over, or otherwise liquidat
e a securities product (e.g., 401(k) plans, IRAs, mutual funds, and brokerage accounts) in favor of an insurance or annuity product, and
is compensated in connection with that advice, the agent may be acting” as an investment advisor, the department said in a bulletin this month.
In such cases, the agent may be subject to registration and compliance with the Securities Act of Kentucky.
Unless registered as an investment advisor, agents should avoid:
Recommending the liquidation or transfer of securities to purchase insurance or annuity products, especially when profiting from that advice.
Providing opinions or forecasts about securities or comparative performance between securities and insurance products that could be interpreted as investment advice.
The DOI did not say what prompted the reminder, or if the DOI has received complaints from consumers. Questions may be directed to the Department of
“The evidence presented was not speculative. It was contemporaneously recorded, exhaustively investigated, and ultimately pr
oven in federal court,” Causey’s letter reads. “Mr. Lindberg’s actions were a calculated attempt to undermine regulatory ov
ersight, evade accountability, and silence those whose duty it was to safeguard policyholders, retirees, and working families.”
See more beautiful photo albums Here >>>
The harm that Lindberg created for policyholders of his troubled life insurance companies continues to play out, the commissioner noted.
“…The consequences of Mr. Lindberg’s misconduct did not end with his conviction,” the letter explains. “The victims of his ille
gal activities, including policyholders and employees whose financial security was placed at risk, continue to suffer the repercus
sions today. These harms are real, ongoing, and irreparable. A pardon would not undo them; it would compound them by signaling that wealth, influence, and persistence can outweigh accountability.”
Lindberg was convicted of attempting to bribe Causey in hopes of removing a DOI official that had exposed Lindberg’s financial regularities, including diverting insurance carrie
r reserves for his other businesses. An appeals court threw out the conviction due to improper jury instructions, but Lind
berg was convicted again in 2024. He has yet to be re-sentenced while courts examine how much in Lindberg may owe in restitution in that and related cases.