A carrier has distributed new guidelines for agents and brokers that show what producers will have to do to comply with the new New York Regulation 187 product suitability and best interest standard regulations.
Any time a producer interacts with a client, the producer will have to document
- Any new recommendations.
- Whether no recommendation was made.
- The client’s decisions about the recommendations.
- The basis for the recommendations.
- Comparisons of any products considered, including a comparison of the non-guaranteed elements.
- The possible effects of any product replacements proposed.
A producer will also have to keep documentation, including a customer profile and needs analysis, for any interaction that leads to a sale.
The producer will have to give the client a carrier product summary and any relevant disclosures, including product limitation disclosures and a New York compensation disclosure notice. If a sale leads to the replacement of an existing product, the producer will have to provide disclosures related to the product replacement.
To prepare to comply with the new New York Regulation 187 rules, a producer will have to take a New York Regulation 187 training course from Reg Ed, Kaplan or LIMRA.
In addition, producers who sell life insurance from Nationwide will have to take a Nationwide Regulation 187 course designed for producers who sell specific types of Nationwide life insurance products.
Nationwide’s Nationwide Life Insurance Company developed the guidance for agents and brokers who are appointed in New York state, according to a copy of the guidance obtained by ThinkAdvisor.com.
New York state has had annuity product suitability regulations in place for years. Producers and insurers have had to verify whether products offered appeared to suit the purchasers’ needs.