On March 28, 2010, the National Association of Insurance Commissioners (“NAIC”) issued a press release announcing adoption of revisions to the existing Suitability in Annuity Transactions Model Regulation (the "Model"). The revised Model aims to strengthen consumer protections in the original Model against inappropriate and abusive annuity marketing practices by, among other things:
- Expanding the type of information that must be collected in order to determine whether a product is suitable for a particular customer;
- Establishing general and product-specific training requirements for producers;
- Requiring principal review of producer recommendations to customers; and
- Clarifying that the insurer is responsible for compliance with the Model’s requirements, even if the insurer contracts with a third party to handle suitability review.
According to industry news, it is expected that the revised Model will be adopted in all US states.
Click here for a copy of the NAIC press release.