What You Need to Know
- Idaho and North Dakota are the eighth and ninth states to adopt the update.
- Insurance industry groups want Virginia to make its version more like the NAIC's model.
- All of the versions are supposed to be compatible with the SEC's Regulation Best Interest.
Idaho and North Dakota have become the latest states to adopt an annuity sales standard update.
The states based the updates on a model developed by the National Association of Insurance Commissioners.
The NAIC tried to make its model with the Securities and Exchange Commission’s Regulation Best Interest. The SEC model requires annuity issuers and sellers to act in the best interest of a consumer, and to disclose conflicts of interest, but it lets annuity sellers choose whether to collect fees from the customers or sales commissions from the annuity issuers.
The Idaho version will begin to take effect July 1, 2021. Experienced annuity producers will have to complete training related to the new update within six months after the effective date.
The North Dakota update will become effective Jan. 1, 2022. Like the Idaho producers, experienced annuity producers in North Dakota will have to get sales standard update training within six months after the effective date.
The American Council of Life Insurers and the National Association of Insurance and Financial Advisors put out statements welcoming the arrival of both states’ annuity sales standard updates.