Life insurance industry groups are still trying to shape a proposed model act amendment that could affect what advisors say to consumers.[@@]
The groups have sent a letter urging the National Association of Insurance Commissioners, Kansas City, Mo., to keep the language that the NAIC adopted in December 2004, when it approved an addition to the Producer Licensing Model Act.
The addition, which consisted of Section A of a multipart proposal, deals with disclosure of compensation arrangements to customers.
The NAIC withheld action on Section B, which would require “generic disclosure” of all compensation arrangements. The NAIC Executive Committee Task Force is evaluating Section B and is supposed to make recommendations about whether to keep Section B as is, amend it or drop it by March 31.
The insurance industry group representatives who signed the new letter to the NAIC are opposing adoption of Section B.
The adoption of Section A of the original proposal “goes as far as industry consensus will allow and ? the need for uniformity in this area strongly suggests that the disclosure requirements of the amendment not be expanded,” the industry representatives write.
The letter was signed by representatives of the Association for Advanced Life Underwriting, Falls Church, Va.; the American Council of Life Insurers, Washington; the National Association of Independent Life Brokerage Agencies, Fairfax, Va.; and the National Association of Insurance and Financial Advisors, Falls Church, Va.
Changes addressing compensation disclosure “should remain focused on the issues that gave rise to scrutiny by attorneys general and regulators,” the industry representatives write. “We do not believe a case can be made that additional disclosure is necessary or appropriate to deal with the issues that have been identified.”