An informal “annuities working group” has emerged from the May 2006 meeting of non-insurance and insurance regulators who were concerned about jurisdictional issues in the regulation of annuities, said Jim Poolman in a breakout session here at the annual meeting of NAVA Inc., Reston. Va.
The purpose is to work together on “many different issues” regarding annuities regulation, said Poolman, who until a month ago was North Dakota’s insurance commissioner; a post he held for 7 years.
Members include regulators from FINRA, the District of Columbia, the North American Securities Administrators Association, Inc., and certain states such as Iowa, Minnesota and North Dakota.
Also called the Annuity Roundtable, the group does not meet regularly, said Poolman, now a Bismarck, N.D. insurance consultant. But they do stay in contact.
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Funding for the group comes from the members’ own organizations, he said.
Any proposals the group makes will be publicly vetted and testimony taken, he added, so the industry can have input.
The outcome “will affect how [the annuity industry] rolls out [its] products,” he predicted. For instance, the group has been working on developing common disclosure requirements for variable and fixed annuities.
“We want people to be able to read and understand the products, rather than to have to go through pages and pages of information that broker-dealers or producers have to give to customers,” he said. “This disclosure should give upsides of the product and include questions that ought to be asked of the producer, [so the consumer can] get the appropriate information” about the product.
Note: NAVA and American Council of Life Insurers are developing related materials. These are “simple documents” on variable annuities, fixed annuities, and fixed index annuities, said Judith Hasenauer in a separate session. A partner of Blazzard & Hasenauer PC, Pompano Beach, Fla., she said NAVA and ACLI will present the documents to the SEC, FINRA and state securities departments for comment.
Common disclosure requirements will help deter unsuitable sales, contended Poolman. They will also give buying power to consumers, and take away consumer “fear of the unknown.” The products are getting more and more complex, he stressed, noting that even annuity company executives and producers do not always fully understand annuities.