Regulation will hold carriers responsible for annuity suitabilityNews added by ProWEB Media on March 30, 2010
Gary Linnell

ProWEB Media

Joined: December 27, 2005

New amendments to the National Association of Insurance Commissioners' (NAIC) annuity suitability model regulations will hold carriers responsible for ensuring that all annuity transactions are suitable for their clients.

Under the previous version of the suitability rule, insurers' obligations only extended to variable annuities, in an attempt to bring more states in line in terms of suitable standards for fixed annuities.

The updated version was approved yesterday at the NAIC's spring meeting in Denver.

The major additions establish a regulatory framework that is intended to hold companies responsible for ensuring that all annuity transactions are suitable for clients; require that producers receive training on the provisions of the annuities and the products they sell; and ensure that suitability standards -- when feasible -- are consistent with those of the Financial Industry Regulatory Authority.
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