The Arkansas Insurance Department has adopted the annuity sales standards update developed by the National Association of Insurance Commissioners (NAIC).
The department is moving ahead with implementing the new version of the NAIC’s Suitability in Annuity Transactions model regulation.
Alan McClain, the Arkansas insurance commissioner, issued a bulletin about the update adoption Dec. 28, 2020. McClain said insurers and annuity producers will have six months from the effective date to begin complying with the new rules.
The new version of the annuity sales includes “best interest” provisions based on the U.S. Securities and Exchange Commission’s Regulation Best Interest.
The SEC drafted the Reg BI regulation after the administration of President Donald Trump let financial services sales standard regulations developed by the U.S. Department of Labor die in court.
The NAIC’s model update requires an agent or broker who sells an annuity to “act in the interest of the consumer under the circumstances known at the time of recommendation is made and without placing the producer’s financial interest ahead of the consumers.”
Iowa, Arizona and Rhode Island were the first states to adopt the model update.
Susan Neely, president of the American Council of Life Insurers, said in comments about the Arkansas move that the ACLI is happy to see Arkansas adopt the model update.
“Thanks to this new rule, retirement savers in Arkansas seeking guaranteed lifetime income from an annuity can be confident that financial professionals they work with are acting in the best interest of consumers,” Neely said.
— Read Delaware Floats ‘Best Interest’ Rule for Annuity Sales, on ThinkAdvisor.