STATE INSURANCE REGULATOR GROUP APPROVES BEST INTEREST MODEL REGULATION

Posted on February 13, 2020

Insured Retirement Institute Urges States to Quickly Adopt

WASHINGTON, D.C. -- The National Association of Insurance Commissioners (NAIC) gave final approval today to a revised model regulation that sets the rules that insurance producers must follow when recommending annuity products to their clients. States can now adopt the model regulation into their own insurance regulations.

The Insured Retirement Institute (IRI) supports the revised model and says it is consistent with the U.S. Securities and Exchange Commission’s Regulation Best Interest (Reg BI), which companies must comply with by June 30. Similar to Reg BI, the model regulation says that insurance producers shall act in the best interest of the consumer under the circumstances known at the time a recommendation is made, without placing the producer’s or the insurer’s financial interest ahead of the consumer’s interest.

“The NAIC model regulation is a significant enhancement to the standard that applies when producers recommend annuities to their clients,” said Wayne Chopus, IRI president and CEO.  “We urge states to move quickly to adopt this new regulation.”

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, comparable or greater standards such as requirements for those who already comply with rigorous standards.

IRI said that it expects many states will be eager to adopt the new annuity model.

“Strong, consistent regulation is important to protect consumers and to preserve consumers’ choice of financial advice and products that meet their financial and retirement planning needs,” Chopus said. “We look forward to working with states to implement this important regulation.”

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Contact: Dan Zielinski