Florida Becomes 20th State to Impose Annuity Suitability Standards
February 29, 2012 by N/A
From the Washington Bureau
February 27, 2012 •
Florida is moving to become the 20th state to impose suitability standards of sales of annuities.
In legislation that recently passed the Florida House, the state is enacting an NAIC model law originally designed to protect seniors when they purchase or exchange annuity products.
The model law was expanded in 2010 to provide annuity protections for consumers of any age. A copy of the standard can be accessed here.
The new law also implements Sec. 989A of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Under this provision of Dodd-Frank, states must adopt annuity suitability standards similar to those in in the NAIC model or lose its right to regulate products such as indexed annuities.
It requires insurer reviews of every annuity transaction, and clarifies that insurers are responsible for compliance with annuity protection provisions – even when insurers contract with third parties. It also preserves the senior suitability protections already provided for in Florida law.
The legislation is consistent with one passed by one passed by California last year.
The legislation is H.R. 1065.
