Iowa insurance regulators are watching closely as the Insurance Marketplace Standards Association develops standards for the sale of index annuity products.
Iowa regulators would like to see IMSA, Bethesda, Md., set up a “let us know” early warning system as IMSA develops standards for index annuity products, according to Jim Mumford, first deputy commissioner with the Iowa Insurance Division.
IMSA, a standard-setting and certification group, says it can help the Iowa division as the division follows up on plans to scrutinize fixed index annuities, also known as equity indexed annuities.
During the spring meeting of the National Association of Insurance Commissioners, Kansas City, Mo., Iowa announced an initiative to oversee the product. The announcement followed a public hearing held by Iowa and Minnesota insurance regulators.
Notification should be “immediate” if IMSA is conducting a certification examination and something is uncovered, Mumford says.
Notification would allow regulators to consider action, including a market conduct examination, Mumford says.
The index product is a good starting point to see if the IMSA program could help regulators, Mumford says.
But, to date, Iowa regulators have not seen that many complaints about the fixed index annuity, and insurance companies seem to have their own standards in place to detect problems, Mumford says.
IMSA President Brian Atchinson says most companies do have protocols in place to detect sales problems.
But, when IMSA meets with regulators later in March, everything from consistent disclosure to training will be discussed, Atchinson says.