Suitability Regulation Takes Another Turn
The long-running saga of crafting a model law for regulating the suitability of insurance product sales has taken another turn–and this time we believe it is a turn for the better.
Putting aside the question of whether a suitability model is necessary in the first place, the most recent response of the National Association of Insurance Commissioners to this situation shows appropriate focus.
Instead of tackling suitability with the regulatory equivalent of Big Bertha, as it has in the past, the NAIC has narrowed the scope of the current draft to suitability of annuity sales to seniors, or those consumers over age 65.
The newly drafted Senior Protection in Annuity Transactions model law and regulation focuses on protecting a segment of the population that regulators, rightly we believe, say is more vulnerable than others to unsavory sales tactics.