The Insurance Marketplace Standards Association has released new suitability standards for annuities and long term care insurance.
The standards are normally available only to members of IMSA, Bethesda, Md., because of concerns that, if the standards were publicly available, non-member companies might say they were complying with the standards without actually going through the required independent assessment process, an IMSA spokeswoman says.
IMSA will make copies of the standards available to the news media for reporting purposes in the next few weeks, the spokeswoman says.
IMSA says in a description of the new standards that they incorporate essential elements of model regulations developed by the National Association of Insurance Commissioners, Kansas City, Mo.
“Inclusion of these provisions means widespread, national application of these consumer protection standards by IMSA companies,” IMSA says.
IMSA member companies in many different states will be able to adopt one set of IMSA standards, rather than having to adopt separate standards in each state in which they operate, according to IMSA Chairman Leon Roday.
In addition to releasing new suitability provisions, IMSA has streamlined its approach to standards to make it more similar to the compliance approach followed by companies and regulators, IMSA says.
The new IMSA standards are effective immediately, and companies must comply with the standards starting Jan. 1, 2008, IMSA says.
Developing the standards update took 18 months and drew on contributions from representatives from a variety of groups, including IMSA member companies, the NAIC, rating agencies and AARP, Washington, IMSA says.
Other representatives came from the National Association of Securities Dealers, Washington, and the National Association of Insurance and Financial Advisors, Falls Church, Va.
To qualify for IMSA membership, a company must successfully complete an internal assessment of its policies and procedures, and then an assessment by an independent examiner to confirm that it meets IMSA’s Principles of Ethical Market Conduct, IMSA says.
To maintain IMSA membership, a company must go through independent assessments every 3 years to show that its business operations continue to abide by IMSA’s code of ethical market conduct, IMSA says.