Certified Financial Consultant (CFC) Practice Exam

Which entity does NOT regulate variable life policies?

1. State government

2. Insurance companies

3. Federal government

4. National Association of Insurance Commissioners

The correct answer is: Federal government

The option indicating that the federal government does not regulate variable life policies is correct. Variable life policies are primarily regulated at the state level. Each state has its own insurance department responsible for overseeing the sale and management of insurance products, including variable life insurance. Insurance companies themselves are responsible for creating and managing these products but do not act as regulatory bodies. Their role is more about compliance with regulations set by state governments and ensuring their offerings meet legal standards. The National Association of Insurance Commissioners (NAIC) plays a critical role by establishing guidelines and best practices that state regulators can adopt, although it does not directly regulate insurance products. Thus, the regulatory framework for variable life policies is largely state-driven rather than being influenced by federal oversight.