A long debated model to ensure annuities are suitable for consumers was fully adopted after over a year of discussion by the National Association of Insurance Commissioners, Kansas City, Mo. The NAIC announced the adoption at its spring meeting in Denver.
The Suitability in Annuity Transactions Model Regulation is a modification of a model that was adopted about 7 years ago by the NAIC.
"After working with consumers, regulators and industry representatives, we have developed stronger standards to better protect American consumers," said Thomas R. Sullivan, Connecticut Insurance Commissioner and Chair of the NAIC Life Insurance and Annuities Committee. "We look forward to working with our legislative colleagues to implement these protections."
Changes adopted to the Model Regulation include:
• Clarifying that the insurer is responsible for compliance with the model’s requirements, even if the insurer contracts with a third party;
• Requiring the review of all annuity transactions; and
• Establishing both general and product-specific training requirements for producers.
The American Council of Life Insurers, Washington, issued a statement following the vote stating that is supports the goal of strong, uniform annuity suitability standards. But it cautioned that state interpretation and implementation must be consistent.