NAIC Adopts Revisions to the Suitability in Annuity Transactions Model Regulation

NAIC Life Insurance and Annuities (A) Committee Adopts Revisions to the Suitability in Annuity Transactions Model Regulation.

The Life Insurance and Annuities (A) Committee adopted revisions to the NAIC Suitability in Annuity Transactions Model Regulationon December 30, 2019.  

The revised Model requires producers to “…act in the best interest of the consumer when making a recommendation of an annuity…” It also requires that insurers “… establish and maintain a system to supervise recommendations so that the insurance needs and financial objectives of consumers at the time of the transaction are effectively addressed.”

The revised Model further:

  • Defines the care, disclosure, conflict of interest, and documentation obligations to be satisfied when acting in the best interest of the consumer.
  • Adds to the list of “consumer profile information” to be considered when making a recommendation.
  • Requires material conflicts of interest be identified and avoided or reasonably managed and disclosed.
  • Requires several new consumer disclosures.
  • Requires additional supervisory responsibilities of insurers.
  • Adds to existing producer training requirements.
  • Expands recordkeeping requirements.