Florida and New York continue their efforts to address suitability of sales of annuities. Florida continues its work on its proposed Rule 69B-162.011 – “Suitability and Disclosure in Annuity Contract – Forms Required.” New York announced a series of hearings to gather information about life insurance and annuity sales transactions.
On June 16, 2009, Florida held a public hearing on its proposed Rule, which adopts two forms producers (or insurers when no producer is involved) must use for an annuity sale to senior consumers. At the hearing, industry members raised various global comments as well as technical drafting comments to the draft forms, and the Florida Department of Financial Services agreed to receive additional written comments for 10 days. Once DFS reviews the comments, it will determine whether modifications to the proposed Rule and/or Forms are needed, and if so, DFS will publish a formal Notice of Change, which will trigger a 21-day comment period on the revisions.
The New York State Insurance Department announced on July 8, 2009, that it is seeking input from consumers, members of the industry, academics and members of the general public with experience or expertise on the subject of suitability in the sale of life insurance or annuities. The NY Department will hold four hearings throughout New York, during August and September to assess whether there is a problem concerning unsuitable sales of life insurance and annuities in New York. The NY Department is seeking to determine if its current regulatory scheme is effective and whether the NY Department should promulgate new regulations that specifically bar unsuitable sales of life insurance and annuities. The NY Department is also exploring whether any new regulation should apply to all life insurance and annuity sales or just a certain portion, and what form any new regulation should take.