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Summary

With the DOL Fiduciary Rule vacated by the Fifth Circuit Court of Appeals in 2018, the industry's fiduciary focus has shifted to state regulators. Of particular impact to the life and annuity industry is the New York Department of Financial Services (DFS) amendment to Regulation 187, renamed, “Suitability and Best Interests in Life Insurance and Annuity Transactions” regulation.

Key changes include:

  • A new best interest standard for recommendations, layered on a suitability standard,
  • Application to life insurance recommendations as well as annuity recommendations,
  • Application to recommendations for certain transactions in in-force contracts,
  • Inclusion of recommendations to refrain from a possible transaction, and
  • Expansion of supervision requirements for insurers.

The amended regulation takes effect August 1, 2019 for annuities, and February 1, 2020 for life insurance.

References

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