Top-Level NAIC Committee OKs Annuity Sales Standard Proposal
January 1, 2020 by Allison Bell
The National Association of Insurance Commissioners is getting closer to a final showdown over an annuity sales standards proposal that could help state insurance regulators create a defense against federal sales standards proposals.
Members of the NAIC’s Life Insurance and Annuities Committee today approved proposed revisions to the NAIC’s Suitability in Annuity Transactions Model Regulation, or Model Regulation Number 275, during a conference call meeting.
The vote tally was not immediately available.
The proposed suitability model revision would require agents, brokers and others selling annuities to act in the best interest of the consumer, and to disclose potential conflicts of interest.
An annuity seller would have to try to get more detailed information about an annuity shopper’s finances, to make sure that the products recommended would fit the consumer’s needs.
But the proposal would let producers continue to use commission-based compensation arrangements.