What You Need to Know
- Eight states have adopted the NAIC's update.
- Seven are considering adopting the update.
- Thirty-four jurisdictions are grayed out.
Texas may soon adopt an annuity sales standard update developed by the National Association of Insurance Commissioners.
But New York state has gone its own way, and, as of March 25, Illinois, Pennsylvania and the entire West Coast had no noteworthy adoption efforts in the pipeline. California, Oregon and Washington were sticking with the annuity suitability rules already in effect.
For now, the West Coast, and a belt stretching from Utah to New Jersey, look like annuity suitability update deserts.
A team at the Annuity Suitability Working Group, an arm of the NAIC, has told the story with a new State Adoption Map, on the working group’s section of the NAIC website.
The Big Picture
The working group is using the map to track implementation of the 2020 revisions to the Suitability in Annuity Transactions Model Regulation Act, which is also known as Model 275.
States like Iowa, Arkansas and Arizona have announced what seems like a blizzard of model update adoptions in the past few months, but the map shows that only eight states are shaded red — meaning that they have actually completed work on adopting update laws or regulations.
Seven states are shaded yellow, meaning that they have model update proposals under active consideration.
New York state and Massachusetts appear with blue shading, to indicate that they’ve adopted their own, homegrown annuity sales standards.
Thirty-three states and the District of Columbia appear with gray shading, to indicate that they have not yet started what the Annuity Suitability Working Group sees as active consideration of suitability model update proposals.
The NAIC and Insurance Regulators’ Turf
Congress generally leaves regulation of the business of insurance to the states.