DOL Fiduciary News: December 6, 2017
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Insurance Regulators Float “Best Interest” Standard With 3% Commission Safe Harbor
Financial Advisor; December 5, 2017
A draft of state insurance regulators’ “best interest” standard unveiled over the weekend includes a potentially controversial 3 percent safe harbor that would not require brokers and agents to disclose commissions unless they are being paid more to sell annuities and life products.
The draft raises questions among consumer groups concerned that the early proposal does not go far enough to alert consumers about costs and conflicts of interest. “We encourage questions; they’re part of the process,” Dean Cameron, chairman of the National Association of Insurance Commissioners Annuity Suitability Working Group, told Financial Advisor Magazine.
“We had to start some place,” said Cameron of the draft that was released at the NAIC’s national fall conference in Hawaii over the weekend. “What we’ve attempted to do is provide some clarity and improve or raise the bar as to the requirements that a producer and carrier will have to meet. We also attempted to put in place a safe harbor so that if a producer meets a list of requirements, he would be deemed compliant.”
3 Things to Know About the Fiduciary Rule's Little Brother
ThinkAdvisor; December 5, 2017
State insurance regulators could make their own annuity sales standards more like the standards in the U.S. Department of Labor's new fiduciary rule.
A top-level division of the National Association of Insurance Commissioners decided Monday to move ahead with an annuity sales standards revision project.
The division, the NAIC's Life Insurance and Annuities Committee, will be asking for public comments on a proposed rewrite of the NAIC's Suitability in Annuity Transactions Model Regulation (Model Number 275).
The chair of a committee working group recently put a "best interest standard of care" provision in the proposed revision.
Comments on the proposed model regulation will be due Jan. 22, 2018. The committee wants to have draft proposed revisions ready in time for official consideration at the NAIC's 2018 spring meeting, which is set to start March 24 in Milwaukee.