A new certification program will make it easier for life insurers to track annuity suitability from third-party distributors, according to the Insurance Marketplace Standards Association, which is launching the clearinghouse system on Jan. 1, 2008.
The creation of a clearinghouse that will examine third-party providers looks at the marketplace as a whole in the examination of whether annuities are suitable, says Brian Atchinson, CEO and president of IMSA, Bethesda, Md. It establishes “an ownership and responsibility for everyone along the distribution channel [to ensure suitability].”
The clearinghouse is a response to the enactment of the Suitability in Annuity Transactions model regulation developed by the National Association of Insurance Commissioners, Kansas City, Mo., in 30 states, according to IMSA. The model regulation requires companies to get annual certifications from third-party distributors to whom they have delegated suitability supervisory responsibilities, IMSA explains.