NU Online News Service, June 12, 10:23 a.m. — Philadelphia
Regulators here for the summer meeting of the National Association of Insurance Commissioners deferred a vote Tuesday on the Life Insurance and Annuities Suitability Model Act and a related model regulation.
The same insurers, producers and consumer representatives who have been fighting the model act and regulation for the past two years continued their attacks at a Life “A” Committee session, and regulators weighed in with questions of their own.
The NAIC suitability proposals deal with the steps producers and insurers must take to ensure that the products they sell suit the needs, finances and risk tolerance levels of the purchasers.
The NAIC, based in Kansas City, Mo., has no direct legislative authority, but state legislatures and insurance regulatory agencies often follow its lead when developing laws and regulations.
North Dakota Insurance Commissioner Jim Poolman asked whether one controversial suitability issue, concerns about questionable replacements of existing life insurance policies and annuity contracts, has something to do with the fact that producers often get compensated up front.