One of the big questions hanging over state insurance regulators this weekend was what regulators will do about the scope of any new insurance sales standards.
Members of the National Association of Insurance Commissioners converged in Boston Saturday for their four-day summer national meeting.
The NAIC’s Annuity Suitability Working was continuing to work on an update of the NAIC’s current sales standards model, which applies only to the sale of annuities.
Regulators in New York state and some other states want to see the same standards apply to sales of both annuities and life insurance products.
Members of the working group decided, at a session held on Sunday, to keep their focus on annuities. For now.
The working group would be updating the Suitability in Annuity Transactions Model Regulation (Model Number 275). That’s the model that requires insurers and financial professionals to verify that any annuity sold to a consumer suits that consumer’s needs.
At the Sunday session, “the working group decided that considering expanding Model Number 275 to include life insurance products was beyond the scope of its current charge,” according t the working group’s summary.
The working group concluded that deciding whether to add life insurance products to the sales standards project is something its parent committee, the NAIC’s Life Insurance and Annuities Committee, can handle.
Members of the parent committee agreed at their own meeting to discuss the idea of extending the scope of the sales standards model at “an appropriate time in the future.”
Links to resources related to the session, including the meeting summary, are available here.
What the NAIC Is
The NAIC is a Kansas City, Missouri-based group for state insurance regulators.
The NAIC does not create laws or regulations directly, but states often start with NAIC models when developing their own laws and regulations.
In some cases, states set up mechanisms that cause some NAIC rules and procedures, such as accounting procedures, to take effect within their borders automatically.
Why the Sales Standards Project Matters to Agents