Posted on October 1, 2019

Recommendation Would Maintain Strong Consumer Protections
While Streamlining Compliance

Comment Letter from IRI

WASHINGTON, D.C. – The Insured Retirement Institute (IRI) today offered a “common-sense” recommendation to a National Association of Insurance Commissioners model regulation that will ensure robust consumer and investor protection while streamlining compliance for professional financial advisors.

The NAIC Model Suitability in Annuity Transactions is working to enhance their standard of conduct model regulations for financial advice professionals. The group is working to align those revisions with recent changes to federal standard of conduct regulations reflected in the U.S. Securities and Exchange Commission’s Regulation Best Interest.

The NAIC model regulation currently includes a safe harbor for broker dealers who comply with Financial Industry Regulatory Authority (FINRA) suitability rules. The safe harbor was created to recognize that FINRA rules met or exceeded the standards in the NAIC model.

In comments to the NAIC, IRI is proposing a change to the safe harbor to add registered investment advisors and financial advisors who work with 401(k) plans, individual retirement accounts (IRA) and other types of retirement plans that are also held to a fiduciary standard of care under the federal Employee Retirement and Income Security Act (ERISA). These financial professionals, as fiduciaries, operate under standards that also meet or exceed the best interest standard in the revised NAIC suitability model.

“We believe it would be appropriate and sensible to afford the same type of safe harbor treatment to all producers who comply with such standards,” said Jason Berkowitz, IRI chief legal and regulatory affairs officer.

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