The National Association of Insurance Commissioners executive committee and plenary plan to consider Annuity Disclosure Model Regulation amendments and a stranger-originated annuity (STOA) transactions bulletin at the NAIC’s summer meeting.
The executive committee of the NAIC, Kansas City, Mo., typically approves a measure before it comes up for a vote by the plenary, the body that represents all voting members of the NAIC.
The executive committee expects to convene by itself at the summer meeting, in Philadelphia, Aug. 30, to hear oral reports from the heads of NAIC affiliates.
The executive committee plans to hold a joint meeting with the plenary Sept. 1.
The annuity disclosure amendments coming up for consideration would set new standards for annuity illustrations.
The proposed STOA bulletin would warn insurers about the safeguards needed to prevent parties from helping consumers buy annuities solely for the purpose of selling the guaranteed benefits to investors.
The proposed bulletin recommends that insurers consider adjusting commissions if an annuity contract is annuitized or a death benefit is paid within its first policy year and there is evidence that the contract was part of a STOA arrangement.
Insurers also should put questions about how consumers will pay for annuities on the applications, set up systems to flag questionable applications, and report any actual or potential STOA transactions to insurance regulators, according to a copy of the proposed bulletin posted on the NAIC website.
- Allison Bell