The National Association of Insurance Commissioners has adopted new versions of its suitability model for annuities and a model audit rule designed to strengthen corporate governance.
These and other models were adopted by the NAIC’s executive committee and plenary during its summer meeting here.
The Senior Protection in Annuity Transactions Model Regulation, also known as the Suitability model regulation, was originally adopted to focus on sales of annuities to those aged 65 and over, explained North Dakota Insurance Commissioner Jim Poolman. The model now covers all consumers, according to Poolman, chair of the NAIC’s Life & Annuities “A” Committee.
The association’s executive and plenary also adopted the Life Insurance and Annuities Replacement model regulation. Poolman said the model addressed internal conversions of term insurance policies of affiliated companies in the same insurance group, treating them as internal conversions in one company rather than conversions to completely different companies.
Other models that were adopted include the Variable Annuity model regulation, which reflects changes to the Standard Nonforfeiture Law, and Actuarial Guideline ABC. which addresses determining the nonforfeiture rate, minimum nonforfeiture benefits and establishing interest rates when a benchmark is used.