Here are 5 things to know about the Annuity Suitability Working Group's refusal-to-disclose information form draft...

1. What Might Change

The form would be an appendix to the NAIC's existing Suitability in Annuity Transactions Model Regulation.

2. Why Annuity Advisors Have Asked for the Appendix

Many policymakers want annuity sellers to get enough client information to recommend products that fit the client like a glove.

But some clients have no interest in telling advisors about their annual income, debts or liquid net worth.

3. The Proposed Refusal to Disclose Form

The current version of the refusal form would let a consumer refuse to provide any information; provide limited information; or declare that an annuity purchase was not based on a producer or insurer's recommendations.

4. Education Obligations

Under the proposed regulations, annuity sellers would have to document that they had warned tight-lipped annuity shoppers about the possible ramifications of withholding consumer profile information.


5. Your Chance to Weigh In

Public comments on the current draft of the refusal-to-provide information form are due at the NAIC Sept. 30.

Members of the Annuity Suitability Working Group are facing a difficult problem: what to do about annuity shoppers who have no interest whatsoever in spilling their guts into a consumer profile information questionnaire.

The group is part of the National Association of Insurance Commissioners (NAIC).

(Related: State Regulators Push Annuity Sales Standards Project One Step Forward)

The suitability working group members are trying to add provisions for tight-lipped annuity shoppers to an existing NAIC model regulation, the Suitability in Annuity Transactions Model Regulation (Model Number 275). State insurance laws and regulations based on the suitability model require annuity sellers to verify that the products consumers are buying suit those consumers’ needs.

Insurer and financial professional groups are asking the working group to maximize flexibility for advisors who are working with rushed or privacy-conscious consumers who have already gone online to figure out what they want.


Consumer group representatives, including Birny Birnbaum of the Center for Economic Justice, have been asking the working group to keep annuity sellers from using a refusal-to-disclose form as a tool for gutting the suitability review requirements.

For five things to know about how the suitability working group has tried to balance the needs of tight-lipped, well-informed consumers against calls for making suitability review requirements stick, see the idea cards in the slideshow above.


Links to information about the Annuity Suitability Working Group’s latest Model Number 275 exposure draft are available here, under the group’s Exposure Drafts tab.

— Read Phishers Are Using the NAIC Logo to Hook Producers, on ThinkAdvisor.

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