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December 04, 2020 at 10:33 AM
The National Association of Insurance Commissioners (NAIC) team is drafting a document that could affect how states apply the NAIC’s new annuity sales rule model update.
The NAIC’s Annuity Suitability Working Group is developing a set of answers to frequently asked questions to flesh out the requirements in the group’s new Suitability in Annuity Transactions Model Regulation (Model Number 275) update.
The working group is preparing to discuss submitted comments on the FAQ answer draft on Dec. 14, at a public web conference meeting.
Resources
- Links to NAIC Annuity Suitability Working Group resources are available here.
- An article about Delaware’s effort to adopt regulations based on the NAIC’s annuity sales standard model is available here.
The NAIC is a Kansas City, Missouri-based group for state insurance regulators.
An NAIC model is a document that a state can use to develop its own insurance law or regulation and can adapt it as needed.
The organization recently adopted the suitability regulation update in an effort to craft new annuity sales standards that would fit well with the U.S. Securities and Exchange Commission’s Regulation Best Interest.
Insurance regulators in Arizona, Iowa and Rhode Island have already adopted the changes in the NAIC’s model update, and Delaware began adopting the changes earlier this week.
The Annuity Suitability Working Group has posted four comments on the FAQ answer draft in the “related documents” tab on its section of the NAIC’s website.
FAQ Comments
The parties that commented often brought up questions when the working group was debating the suitability model update: the Federation of Americans for Consumer Choice, the National Association of Insurance and Financial Advisors (NAIFA), the Independent Insurance Agents and Brokers of America, XY Planning Network, and a trade group coalition that includes the American Council of Life Insurers.
Michael Kitces, co-founder of XY Planning Network, wrote that his group continues to object to the NAIC model update.
