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October 31, 2022 at 10:18 AM
What You Need to Know
- The updated Alaska annuity sales standard requires agents and brokers who sell annuities to complete regulation-related training requirements by July 15, 2023.
- States have been hurrying to adopt the NAIC annuity suitability update in an effort to avoid potential SEC oversight under a provision in the Dodd-Frank Act.
- The outcome of the elections could speed up or slow down annuity sales standard update efforts in some states.
Alaska last week became the 29th state to adopt an annuity sales standard update developed by the National Association of Insurance Commissioners.
The state’s Division of Insurance will require insurance producers, and insurers selling annuities directly to consumers to act in the best interest of consumers when recommending annuities, as well as verifying that the recommendations are in the best interest of the consumer.
Colorado, Hawaii and North Carolina have also updated their annuity sales standards in recent months, by passing laws or changing annuity sales standards regulations.
What It Means
Your and any other professionals who help your clients with annuities might have to change how you review the available products and how you document the reasons behind your annuity recommendations.
Alaska Regulation Details
The updated Alaska annuity sales standard requires agents and brokers who sell annuities to complete regulation-related training requirements by July 15, 2023.
Insurance producers can meet the training requirements by taking a 4-credit-hour course; a 1-credit-hour course that focuses on sales practices, replacement and disclosure requirements; or a similar course.
The American Council of Life Insurers and the National Association of Insurance and Financial Advisors put out a joint statement welcoming Alaska’s adoption of the best interest standard update.
The Background
The NAIC is a group for state insurance regulators. It has no direct ability to set states’ insurance rules, but states often start with NAIC models and model updates when drafting bills and regulations.
States have been hurrying to adopt the NAIC annuity suitability update in an effort to avoid or reduce the possibility that the U.S. Securities and Exchange Commission could use a provision in the Dodd-Frank Act to share jurisdiction over non-variable annuity insurance sales with state insurance regulators.
State regulators already share oversight over variable annuity sales with the SEC.
