Final answer:
State insurance departments regulate variable products and may require a producer to have not only a life and securities license, but also a variable life and securities license due to the investment risks involved. Regulation aims to keep insurance prices low and ensure availability, which can lead to complex political and market challenges.
Step-by-step explanation:
In some states, to sell variable products, a producer is required to have a variable life and securities license in addition to a life insurance license. This is because variable products often have components that are invested in the stock market, which introduces an element of investment risk that is not present in traditional life insurance products. This necessitates a more comprehensive understanding and regulatory oversight.
State insurance departments have the responsibility of government regulation of insurance, which includes maintaining affordable insurance prices while also ensuring accessibility. The complexities that arise when trying to balance these objectives can lead to conflicts and deep political entanglement. For example, efforts to keep insurance premiums low may cause companies to avoid insuring high-risk individuals or even to leave the market entirely, as seen in New Jersey with auto insurance and in Florida with property insurance provided by State Farm.