Posted on December 30, 2019

WASHINGTON, D.C. -- The National Association of Insurance Commissioners’ (NAIC) Life Insurance and Annuities (A) Committee today voted to approve the revised Suitability in Annuity Transactions Model Regulation during a conference call.

The next procedural step before individual states may consider it for adoption is approval by the full NAIC (Executive Committee and Plenary). The Insured Retirement Institute (IRI)  is optimistic that this will occur in early 2020.

“This revised model regulation will advance consumer protection with a best interest standard for insurance producers,” said Jason Berkowitz, IRI Chief Legal and Regulatory Affairs Officer. “Throughout this process, insurance regulators at NAIC working group and committee level have worked in an open, transparent manner to craft a model that is generally consistent with Regulation Best Interest and the right approach to provide strong consumer protection.”

Regulation Best Interest is a federal standard of conduct rule finalized by the U.S. Securities and Exchange Commission (SEC). This regulation takes effect on July 1, 2020.

The NAIC proposal also includes IRI-recommended language to provide a safe harbor for all insurance producers who are subject to, and actually comply with, equivalent or greater standards such as Regulation Best Interest or the Investment Advisers Act. This will avoid duplicative compliance requirements for those who already comply with rigorous standards.

“We are optimistic that the NAIC will approve this important revised model regulation,” Berkowitz said. “If approved, IRI is prepared to work immediately with states to quickly implement this important new consumer protection regulation.”

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Contact: Dan Zielinski