Comment Deadline Arrives for NAIC Annuity Sales Best-Interest Rule
February 20, 2019 by John Manganaro
February 25th was the deadline set by the National Association of Insurance Commissioners (NAIC) for industry comments on its proposed revisions to the current “suitability” standard governing the sale of annuity products—revisions that NAIC officials say would effectively establish a national “best interest” suitability regime.
NAIC is the U.S. standard-setting and regulatory support organization created and governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer reviews, and coordinate their regulatory oversight.
According to attorneys with Stradley Ronon, the outcome of the NAIC’s model rulemaking process is one of the top regulatory issues for the insurance, advisory and brokerage industries in 2019. For its part, NAIC has made it a goal to finish its work on a model best-interest standard this year. On the NAIC website, it is further noted that the Annuity Suitability Working Group will also consider other ways to “promote greater uniformity across NAIC-member jurisdictions.”
In commentary shared with PLANADVISER, Stradley Ronon attorneys note that the working group tasked with revising the NAIC’s model suitability rule for the sale of annuity products was hard at work throughout 2018 and early 2019, seeking to replace its current “suitability” standard for the sale of annuity products with a rule that would apply a “best interest” standard.
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