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IRI Asks Maine to Adopt Standard Best-Interest Regs

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Commenters from the Insured Retirement Institute (IRI) are asking the Maine Bureau of Insurance to make its version of the Suitability in Annuity Transactions model update as much like the standard version of possible.

The Maine bureau has proposed a state regulation that’s almost identical to the version developed by the National Association of Insurance Commissioners (NAIC). The bureau ended a public comment period for its version Friday.

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Jason Berkowitz, IRI’s chief legal and regulatory affairs officer, and Liz Pujolas, IRI’s state affairs director, wrote to say they like the Maine proposal but would prefer that it be even more like the NAIC version.

“Strong, consistent regulation is important to protect consumers and to preserve consumers’ choice of financial advice and products that meet their financial and retirement planning needs,” the IRI reps wrote in their comment letter.

The Maine version, for example, would require a consumer to sign every page of a disclosure form.

“This requirement is not included in the NAIC model, and we respectfully request that the bureau remove this language,” the IRI reps write. “Should a consumer fail to sign all pages, the application could be at risk for rejection as ‘not in good order,’ which would delay the consumer’s desired purchase without adding any meaningful consumer protection.”

The IRI reps also note that the NAIC is developing a set of answers to frequently asked questions to interpret the model update, and they are asking Maine to issue guidance to incorporate the final FAQ content into their own version of the regulations.

IRI represents insurers, financial professionals, and others who have an interest in income planning products.

The NAIC model requires annuity issuers and producers to act in the best interest of an annuity prospect or purchaser. The drafters were trying to develop a regulation that would mesh well with the  Securities and Exchange Commission’s Regulation Best Interest.

In related news, IRI has pointed that Nebraska has an annuity update bill, Legislative Bill 22.

Nebraska’s NAIC model update implementation effort could be the 12th state model update effort.

Jamie Bigayer and Ann Young Black, lawyers with Carlton Fields, have listed 11 other annuity suitability model adoption projects in a table accompanying an article on JDSupra.

Arizona, Iowa and Rhode Island have completed their update adoption efforts.

— Read Arkansas Adopts NAIC Annuity Model Best Interest Updateon ThinkAdvisor.

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