Variable product commission disclosure proposals developed by the New York State Insurance Department and the U.S. Securities and Exchange Commission pose an immediate danger to the life industry, an industry policy specialist says.

New York and the SEC are talking about requiring financial intermediaries should provide more information about commissions.

That, along with Congressional efforts to impose the fiduciary standard, rather than the suitability standard, on sellers of variable insurance products is one of two immediate dangers to the life insurance industry, Marc Cadin, a senior vice president at the Association for Advanced Life Underwriting, Falls Church, Va., said Tuesday while participating in a panel discussion at the AALU’s annual meeting.

Another participant, Kenneth Kies, founder and managing director of the Federal Policy Group, Washington, said he thinks that the AALU can mitigate the negative consequences of the kind of commission disclosure requirements now being weighed by the New York department. But he warned that the department’s decision could have a nationwide impact.

“Our sense is that officials in the department are becoming more realistic,” Kies said. “This is a work in progress–but an important one, given the implications for exporting commission disclosure requirements to other states.”

“This issue is so important that it’s dominating the AALU board’s agenda,” Cadin said. “We’re now debating whether to sue the New York Department of Insurance.”

The commission disclosure proposal “is a solution in search of a problem,” Cadin added. “We’ll do what it takes to minimize the damage this regulation might cause to our business.”

Other points that came out during the panel discussion:

- The federal estate tax likely will continue to exist, rather than disappearing, and the estate tax level might be higher than it is now.

- The National Commission on Fiscal Responsibility and Reform, a bipartisan budget-cutting panel co-chaired by former senators Erskine Bowles and Alan Simpson, may have trouble making much headway.

“I think it will take a fiscal event to get every elected official to the table,” Kies said. “That event could be a downgrading of the credit rating for U.S. treasuries, which may happen as early 2014 if we continue on our current path.”