States adopt NAIC Suitability in Annuity Transactions Model Reg. #275
As you may already know, the NAIC updated its suitability model to include a Best Interest standard that applies to any sale or recommendation of an annuity. Producers now have a care, conflict of interest, disclosure, and documentation obligation that will apply to all annuity carriers with which they do business.
States adopting the updated model will have new state-required NAIC training for the sale or recommendation of any annuity as well as different forms required related to the new business process for the sale or recommendation of a fixed index annuity (FIA).
New NAIC training course
There will be a new state-required training module that must be taken in order to comply with the regulation. This training will be supplied by industry vendors such as RegEd and Kaplan.
- For producers who have completed the current Annuity 4-hour training, there will be a new 1-hour supplemental training required. Please note, there is a grace period of 6 months for producers who have previously taken the 4-hour training and are currently licensed in the state adopting the regulation.
- Producers who have not taken the current Annuity 4-hour training will be required to take a new 4-hour training that includes the new, best interest information before they can submit business.
Updated new business process for FIAs
- A new Consumer Profile Form will be used in place of the existing suitability form in states that are adopting the new rule. The Consumer Profile Form will be made available on the day that the state launches the new regulation. States that have not approved the new regulation will still use the existing suitability form.
- The existing Replacement Comparison form will be required for each replacement, and the lookback time period has increased from 36 months to 60 months.
- New point-of-sale documentation that must be completed and retained as outlined in the state regulation.
As of April 1, 2021, below are the states that have adopted the Best Interest regulations and their effective dates. AIPMA will update this section as more states adopt these regulations.
- Arkansas: Effective 6/29/2021
- Arizona: Effective 12/31/2020
- Delaware: Effective 8/1/2021
- Idaho: Effective 7/1/2021
- Iowa: Effective 1/1/2021
- Michigan: Effective 6/29/2021
- Nebraska: Effective 1/1/2022
- North Dakota: Effective 1/1/2022
- Ohio: 2/14/2021
- Rhode Island: Effective 4/2/2021
- States with pending proposals: Alabama, Kentucky, Maine, Montana, Nevada, Texas and Virginia.
Applications signed prior to a state’s adoption date will likely be treated according to that state’s current requirements. Applications signed after a state’s adoption date must meet new state requirements prior to issue.
Latest PostsHelping Your Marijuana Using Clients Get Life InsuranceApril 2021 Giving Back: How Being a Foresters Member Can HelpApril 2021 Comparing Life Insurance Costs to a Daily Cup of CoffeeApril 2021
TagsWeb Meetings Aipma Carriers Transamerica Myga North American Term Life Insurance Financial Planning Job Posting Taxes Covid19 American Equity Annuity Fixed Annuity Permanent Life Insurance Charity Global Atlantic Drop Ticket Secure Act Nationwide Retirement Planning Open Enrollment Social Media Women Legal And General Equitrust Myaip Securian Financial Webinars Foresters Financial Fixed Indexed Annuity Lincoln Financial Group Aig Protective Working From Home Tickit Medicare_Supplements Culture Tips Nafa Holiday Genworth Coronavirus Covid 19 Regional Director Fidelity Guaranty Life Long_Term_Care Life_Insurance Ira Limra Tax Season Roth Ira Regulations Bestow Senior Health Shop
2041 E. Square Lake Road, Suite 100, Troy, Michigan 48085-3897
For more than 35 years, AIP Marketing Alliance (AIPMA) serves as a premier life insurance and annuity distribution partner to provide full-service support to independent wholesalers, brokerages and agents from our Troy, Michigan office. Copyright 2021