In a February 15 comment letter to state insurance regulators at the National Association of Insurance Commissioners (NAIC), NAIFA joined with the AALU, the Financial Services Institute (FSI), and other groups to endorse a “best interest” standard of care. The letter responded to a draft NAIC “enhanced suitability” model regulation–which has been in the works at the NAIC for many, many months–and suggested that:
- The exemption for retirement plans should not be limited to “annuities that are not individually solicited.”
- The Suitability Model should not be expanded to apply to in-force transactions by defining “consumer” to include existing annuity owners.
- The NAIC should take appropriate steps to avoid misinterpretation or misapplication of the enhanced standard of conduct contemplated by the Exposure Draft.
- The Exposure Draft should take a more streamlined approach to compensation disclosure.
- The Suitability Model should apply only to producers who directly recommend annuities to their clients and should not be extended to cover others who participate in making recommendations.
The joint comment letter–as well as individual letters submitted by NAIFA, the ACLI, the Insured Retirement Institute (IRI), and the NYS Department of Financial Services (DFS), among others–is available HERE. The NAIC “enhanced suitability” working draft is available HERE.