The National Association of Insurance Commissioners (“NAIC”) issued a press release on October 12, 2011 announcing, among other things, amendment to the Annuity Disclosure Model Regulation (#245) (the “Model”), adopted by  a joint executive/plenary session.  The amendments are designed to improve disclosure and reduce consumer confusion regarding annuity purchases.

Among other things, the amended Model:

  1. Provides uniform guidance on developing consumer disclosures to inform consumers about how annuity products work;
  2. Requires that consumers receive a buyer’s guide when purchasing an annuity;
  3. Improves requirements with respect to illustration development; and
  4. Requires that customers be provided with an explanation of any riders, along with penalties that apply to withdrawals, and well as information about the tax treatment of annuities.

Click here for a copy of the NAIC press release.