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April 15, 2010 at 08:00 PM
The Wisconsin Office of the Commissioner of Insurance has asked three life insurers to change procedures and guidelines for determining product suitability.
The office has included that recommendation and others in reports on market conduct examinations of American Investors Life Insurance Company, Topeka, Kan.; Aviva Life and Annuity Company, Des Moines, Iowa; and Jackson National Life Company, Denver.
American Investors and Aviva are units of Aviva P.L.C., Norwich, United Kingdom.
Jackson National is a unit of Prudential P.L.C., London, which has no affiliation with Prudential Financial Inc., Newark, N.J.
Suitability standards govern the processes insurers and other financial services companies use when deciding whether the products being offered to consumers suit the needs of those consumers.
The Wisconsin office has advised American Investors and Aviva Life to modify existing guidelines to provide “criteria to be considered” when determining whether an agent has “reasonable grounds for believing that the recommendation was suitable for the consumer.”
The office also recommends that the two companies implement procedures to ensure that all agents are provided with their respective company’s “position on suitability” to ensure compliance with Wisconsin state law.
The office has asked Jackson National to develop written procedures about consumers’ financial situation and investment orientation, to ensure that agents have “reasonable grounds to believe that the recommendation to purchase or exchange an annuity is suitable.”
The office also has advised Jackson National to develop procedures to “monitor and supervise” the fixed and fixed annuity recommendations of its agents.
