Some Refreshing Sentiments On The Subject Of Suitability
Judging from the comments of Utah Insurance Commissioner Merwin Stewart, a fresh breeze of reasonableness and rationality seems to be blowing through the regulatory community on the subject of suitability.
Speaking to National Underwriter after a regulators-only get-together earlier this month, Stewart articulated sentiments that we cannot remember hearing before from a regulator on this issue.
As Jim Connolly reported in last weeks issue, “Stewart says it is his feeling that if a company implements good standards that are visible to regulators, keeps customers informed and offers assurances that a good job is being done, then regulators needs will be satisfied.”
In addition, Stewart drew a distinction between “perfectly suitable” and “reasonably suitable.” A product should be suitable when sold, he said, but regulators do not want to create a liability for a company or insurer by implementing a standard that does not account for changes in customers circumstances.