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The agencies that police the new annuity sales rules want advice about the best ways to do that.
The National Association of Insurance Commissioners' Annuity Suitability Working Group has been drafting a request for comments about strategies for enforcing the NAIC's updated annuity "best interest" standard.
At press time, the working group was preparing to discuss the draft during a web-based meeting scheduled to take place Wednesday.
The draft states that the working group wants input from "regulators, insurers, trade groups, consumer groups and other interested parties," according to a copy of the draft posted on the working group's website.
The working group also wants comments about compliance challenges related to the best interest standard.
What it means: The request for comments could shape how state regulation of annuity sales really works.
Draft details: Drafters propose asking for commenters' thoughts about updating annuity producer training programs to reflect the best-interest standard and how to verify whether producers have completed the required classes.
Another focus is insurance company supervision systems.
"What systems or procedures does the insurer utilize to detect recommendations not in compliance?" the working group asks in the draft. "Does the insurer take any steps to confirm the accuracy of consumer profile information or the basis of the recommendation?"
Drafters note that an insurer could have another entity supervise annuity producers.
"If supervision is delegated, what procedures does the insurer use to ensure that the third party is in compliance and that the third party's procedures are effective?" the working group asks.
In a section about required disclosures and potential conflicts of interest, the working group seeks advice about which forms an insurer should collect and retain in connection with best-interest compliance and whether the insurer should identify and eliminate conflicts of interest.
Credit: piai/Adobe Stock
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