The group reps also say that any new life insurance and annuity sales rules should actually reduce the sellers’ potential conflicts of interest, not simply increase disclosure requirements.
(Related: Indexed Universal Life Sales Rise 3.4%: Wink)
“The same standard of care — best interest of the consumer — is clearly as appropriate for investment-type life insurance — for example, indexed universal life — as it is for annuity products,” the consumer reps write in a comment letter sent to the Annuity Suitability Working Group.
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“A uniform standard of care across all types of investment products means both consistent consumer protections and a level regulatory framework preventing one type of investment product from regulatory arbitrage,” the reps write.
The working group, part of the National Association of Insurance Commissioners, is looking at how regulators should respond to recent efforts by the U.S. Department of Labor and the U.S. Securities and Exchange Commissioners to change sales and marketing standards for financial products, including annuities.
The working group included the consumer reps’ letter in a packet of documents for the NAIC’s recent summer meeting, in Philadelphia. The working group held a session at the meeting Sunday.
The NAIC provides funding for some groups to speak for consumers in NAIC proceedings, and it also provides an official role in NAIC proceedings for some consumer group reps who have their own sources of funding.
The group calling for insurance regulators to defend tough life and annuity sales standards includes well-known reps such as Birny Birnbaum, Bonnie Burns and Timothy Jost, and groups such as the AFLI-CIO, Better Markets and Consumers Union.