The California Department of Insurance is proposing regulations based on the Suitability in Annuity Transactions Model Regulations approved by the National Association of Insurance Commissioners (NAIC), Kansas City, Mo., in March 2010.
The regulations will set guidelines for recommendations to consumers ages 65 and older that result in the sales of annuities, California department officials say.
The proposed regulations will exempt some transactions, such as direct response solicitations where there is no recommendation made based on information collected from the consumer, officials say.
The regulations also will exempt efforts to sell annuities to retirement plans governed by the federal Employee Retirement Income Security Act.
Insurers affected by the regulations would have to set up a supervision system designed to ensure that the insurers and their producers verify that the annuities sold to older consumers suit those consumers’ needs.
The New York State Insurance Department has adopted suitability regulations and regulations governing use of professional designations as emergency regulations, officials say.
The suitability regulations will set annuity sales suitability rules.
The designations regulations will prohibit producers from using titles that suggest that they have special expertise on issues regarding seniors when, in reality, they have no special expertise, officials say.