NAIC Adopts New Model Suitability Regulation
05-04-2010
Change is in the air. While Congress was busy with healthcare reform, the National Association of Insurance Commissioners (NAIC) adopted a new Suitability in Annuity Transactions Model Regulation.
The model regulation (passed by NAIC on March 28th) is just that – a "model reg," which still needs to be adopted by the various state legislatures before it becomes law. Individual states can say 'no thank you' (e.g., do nothing), adopt a modified version, or adopt it in its entirety. Iowa and Wisconsin have stepped up to the plate first with proposed suitability rules based largely on the new model. Other states are likely to follow in the near future.
The new model regulation requires:
What will this mean to you and your business? New Business procedures and forms will likely change. How and to what extent? We are in the process of analyzing the new model regulation in order make that determination. Rest assured, BUA will be here to help guide you through these changes, and we will do our best to look for industry uniformity whenever possible.
In the meantime, one way you can help your business succeed in this new environment is to get comfortable with doing suitability analyses. Build into your sales process a detailed acquisition and analysis of a client's financial fitness for a particular annuity. Ensure that the client understands the key elements of what you are proposing, and be sure to document and retain all the information collected and analysis performed from the sale.
If you have any questions or need any additional product information please contact your BUA Brokerage Sales Consultant.
