Held September 21-24 in Washington, D.C., the NAIC 2008 Fall National Meeting produced the following significant developments:
- Annuity Suitability and Disclosure. The Wisconsin Insurance Department recently developed “Annuity Supervision, Monitoring and Training Guidelines,” which were presented to the Suitability of Annuity Sales Working Group as points for consideration in updating the Suitability in Annuity Transactions Model Regulation. The Working Group primarily focused on three elements of the Guidelines: producer training, liquidity analysis and “red flags” that would trigger heightened scrutiny. The Working Group established a subgroup (CA, FL & WI) to prepare a draft “liquidity needs” questionnaire for use at point-of-sale, which is expected to be presented to the Working Group at the upcoming Winter National Meeting. The Consumer Guides subgroup also expects to present draft Consumer Guides for fixed indexed annuities and variable annuities to the Working Group for discussion at that meeting.
- New Working Groups & Task Forces. An Indexed Annuities (EX) Working Group was formed to (i) develop a response on proposed SEC Rule 151A, (ii) conduct a coordinated, nationwide data call with a specific focus on index annuity sales and marketing practices, and (iii) coordinate regulatory responses based on the data call. An AIG Special (EX) Task Force was created to (i) oversee regulatory activities related to AIG insurance subsidiaries and coordinate interaction between regulators and the company, (ii) manage communication of information and coordination of activities related to insurers proposed to be sold by AIG, and (iii) ensure concerns regarding the 17 life insurers in the AIG group are adequately addressed. An Annuity Disclosure (A) Working Group was charged with reviewing and considering changes to the Annuity Disclosure Model Regulation to improve the disclosure of annuity product information, provide insurers uniform guidance and monitor distribution of annuities.
- Senior Designations Model Regulation. The NAIC Plenary formally adopted the Model Regulation on the Use of Senior Specific Certifications and Professional Designations in the Sale of Life Insurance and Annuities. The regulation seeks to prevent fraud and abusive sales practices aimed at seniors, and is patterned on NASAA’s model rule.