The NAIC Life and Annuities Committee has posted a draft model bulletin (the "Draft Bulletin") recommending that insurers implement certain safeguards in order to limit their potential exposure to stranger-originated annuity transactions ("STOA"). STOA transactions are defined in the Draft Bulletin as transactions in which agents or investors offer an individual, who is usually a stranger to the agent or investor, a nominal fee for the use of the individual's identity as the measuring life on an investment oriented annuity. The Draft Bulletin provides insurers with information regarding the ways in which agents and investors arrange STOA, and techniques used by such agents and investors to avoid scrutiny of STOA policies and detection of the transaction. The Draft Bulletin also provides insurers with suggestions that might assist them in detecting STOA.

Comments regarding the Draft Bulletin may be submitted to the NAIC until October 8, 2010. To view the Draft Bulletin, click here.