Regulators will tackle 2 high profile issues by developing model laws to regulate the suitability of annuity sales as well as the use of senior designations.
The unanimous votes to create model laws to curb these market conduct abuses were taken during the Life Insurance and Annuities “A” Committee of the National Association of Insurance Commissioners, Kansas City, Mo.
In individual states such as Florida, Iowa and Missouri, action is already being taken to ensure that adequate suitability standards are in place. In Florida, for instance, a new law was enacted because “we found a lot of abuses specific in relation to annuities,” according to Mary Beth Senkiewicz, a deputy commissioner in Florida.
States have been looking for a uniform way to address suitability of annuity sales. Currently, states can choose between a NAIC model law that addresses the suitability of annuity sales for seniors or a subsequent model that expands those protections to all consumers.
During the discussion it was noted that the North American Securities Administrators Association, Washington, has developed a suitability model that has actually been incorporated into regulation in states such as Missouri. It was recommended that when work does begin on a model at the NAIC, that the NASAA model be examined and possibly incorporated into regulators’ work.
Discussion over the development of models for these issues is expected to be held during the “A” Committee meeting on June 1 at the summer NAIC meeting in San Francisco.