Which scenario would require FINRA registration for an agent?

In this scenario, an agent would be required to register with FINRA (the Financial Industry Regulatory Authority) when selling variable life insurance policies. This requirement arises from the nature of variable life insurance products, which have investment components tied to the performance of underlying securities such as stocks and bonds. Since these policies can involve investment risk and market fluctuations, the agents need to be adequately trained and licensed to provide clients with sound financial guidance and to protect consumers.

Variable life insurance is treated similarly to securities in that it requires agents to comply with specific regulatory standards due to the potential risks involved for the policyholder. Consequently, this dual nature—insurance along with investment—necessitates that the agent has a proper understanding of both the insurance regulations and the securities regulations enforced by FINRA.

In contrast, selling fixed life insurance policies or providing general financial advice does not inherently require FINRA registration, as these activities do not involve dealing with securities. Likewise, while selling mutual funds does require registration because mutual funds are investment products, the focus of this question is specifically on the activity of selling variable life insurance, which intertwines both insurance and securities regulations, thus highlighting the necessity for FINRA registration.