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NAIC Finding Little Support for Best-Interest Annuity Model
InsuranceNewsNet; February 14, 2018
The National Association of Insurance Commissioners’ draft best-interest model law for annuity transactions is at the center of a fierce debate in the insurance world.
The NAIC Annuity Suitability Working Group accomplished a significant goal in 2017 by completing its Annuity Transactions Model Regulation. The regulation is seen as a proactive bid to transition annuity sales from suitability standards to a stronger, consumer-focused standard.
But based on comment letters, commissioners might have misjudged the readiness for another layer of fiduciary type standards.
Neither Dean L. Cameron nor Doug Ommen, chairman and vice chairman of the working group, respectively, returned phone calls seeking comment today. On one side, industry organizations say the model law standards are too harsh and will suffocate annuity sales. These organizations are precise with their arguments, having battled the Department of Labor over its fiduciary rule for the past two-plus years.
“The proposed revisions to the existing model would dramatically alter the standard of care that applies to the sale of all forms of annuities and impose broad new compensation restrictions without offering clear benefit to consumers,” wrote Wesley Bissett, senior counsel for government affairs for the Independent Insurance Agents and Brokers of America.
7 Objections to the States' Annuity Sales Standard Proposal
ThinkAdvisor; February 13, 2018
The groups that represent annuity makers, distributors and buyers spent years roasting U.S. Department of Labor officials over the DOL's fiduciary rule.
Now that the DOL has put enforcing the rule's implementation guidelines on hold for at least 18 months, a team at the National Association of Insurance Commissioners is getting the angry comment letters.
The NAIC's Life Insurance and Annuities Committee recently asked for public comments on proposed revisions to the NAIC's Suitability in Annuity Transactions Model Regulation.
The NAIC has no direct ability to change states' insurance laws and regulations. But states often use NAIC models when they are developing their own proposals, and, in some cases, they use statutes or regulations to conform with some NAIC actions, such as changes in insurance accounting guidelines, automatically.