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A deferred annuity buyer’s guide roundup

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With the adoption of three new versions of the deferred annuity buyer’s guide by the NAIC at its Summer 2013 meeting, states have been issuing guidance documents concerning the use of such guides. The three new versions of the deferred annuity buyer’s guide are: the “Buyer’s Guide for Deferred Annuities Variable”; the “Buyer’s Guide for Deferred Annuities Fixed”; and the “Buyer’s Guide for Deferred Annuities”.

Since ensuring “version compliance” is a perennial issue for life insurers, a state round-up of some recent regulatory updates is in order.

  • Colorado’s Bulletin B-4.67, dated Jan. 14, 2014, encourages insurers to both review the revised NAIC buyer’s guide, as well as make any necessary changes to maintain compliance with Colorado insurance regulations, including the requirements of Colorado Insurance Regulation 4-1-12, Concerning the Disclosure Requirements for Annuity Transactions.
  • Idaho’s Bulletin 13-06, dated Dec. 11, 2013, informs carriers and producers that they may satisfy the buyer’s guide statutory requirement by providing consumers either the version of the NAIC Buyer’s Guide to Fixed Deferred Annuities with Appendix for Equity-Indexed Annuities last revised in 2007 – ANB-LE (1999, 2007), or the 2013 NAIC Buyer’s Guide for Deferred Annuities – Fixed – ANB-LE (2013).
  • Iowa’s Bulletin 13-03, dated Oct. 21, 2013, indicates that the Division will consider companies and producers selling fixed annuities, including fixed indexed annuities, to have met the requirements of Section 191-15.64 if the companies and producers use an appropriate version of the new NAIC deferred annuity buyer’s guide or the older version of the NAIC deferred annuity buyer’s guide through March 31, 2014. However, after March 31, 2014, different rules apply. Both companies and producers selling any fixed annuity, including any fixed indexed annuity, as well as companies and producers selling variable annuities or other securities registered products must use an appropriate version of the new NAIC annuity buyer’s guide as required under Iowa law.
  • Maine’s Bulletin 389, issued Oct. 8, 2013, advises the industry that the Bureau was authorizing insurers and producers to use the 2013 Buyer’s Guide in their annuity disclosures in lieu of the obsolete 1998 Buyer’s Guide.
  • Oklahoma’s Bulletin No. LH 2013-02, issued Oct. 24, 2013, indicates that the OID will allow all insurance companies and producers to use either the recently updated 2013 NAIC Buyer’s Guide or the version contained in Appendix S of the Oklahoma Administrative Code Title 365, Chapter 25 until a change to the Oklahoma Administrative Code can be made.
  • Effective Mar. 11, 2014, Utah adopted the NAIC’s 2013 versions of the “Buyer’s Guide for Deferred Annuities,” the “Buyer’s Guide for Deferred Annuities – Fixed” and the “Buyer’s Guide for Deferred Annuities – Variable”.

Heading further into 2014, more states can be expected to address the issue of adopting updated versions of buyer’s guides. While there may be lead-times established for required use, companies may want to monitor this issue to ensure compliance going forward.